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Should Agencies Offer Business Reopening Advice?

An agency has several clients that are nonprofit private swimming pool clubs. They are looking to the agency for help to reopen safely, including advice with waivers and standard procedures.
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Our agency has several clients that are nonprofit private swimming pool clubs. As businesses begin to reopen after the pandemic, these organizations are looking to us for how best to reopen safely and how their insurance will respond.

Q: We know that their insurance will not respond to a COVID-19-related lawsuit, but how can we help with waivers and standard procedures that will give them a level of comfort when they can reopen?

Response 1: Do not give advice on how to reopen. That is not within your licensure and likely not within your expertise. Any guidance on how to reopen should be provided by health officials because there are too many nuances.

Response 2: What is the basis for the conclusion that no liability insurance will respond to a COVID-19 complaint? Is there a virus exclusion on the commercial general liability policy?

Aside from that, your customer should follow all protocols recommended by national, state and local authorities for reopening businesses. After all, negligence is measured by what a reasonable person would do in the same or similar situations, meaning the defense against a negligence claim for the use of the premises is whether the business acted reasonably under the circumstances.

Response 3: Unless you have a law degree, you should not be drafting waiver agreements. You should probably seek your own legal advice about dealing with customers who are looking for expertise beyond insurance.

Response 4: Your role is to advise your client on things insurance-related, and it seems you’re prepared to do that. As far as reopening safely, you can certainly tell them they must comply with any relevant laws and regulations, but anything beyond that or more technical in nature should be guided by the local health department, perhaps with supplemental support from whatever trade association or organization serves swim clubs.

Also, all advice and instruction given by the manufacturer and installer of the pool and its equipment must be reviewed and heeded.

Response 5: Your clients should consult with their lawyers and the insurer’s loss control departments. Some of the big brokerage houses, such as Arthur J. Gallagher, send out frequent notices and recommendations to the hospitality industry about coverage and preparedness. The amount of information at various sites is extensive. Some might be good and some might be erroneous. Be cautious about what you pass on.

Response 6: Look closely at the policy forms. I recently saw one with a communicable disease exclusion. I'm telling my clients to follow federal and state health department advisories and staying out of the decisions. 

Response 7: You've already answered the coverage question. Unless you're a safety expert, the answer to the best practices question is: Talk to an expert. And you already know the answer to drafting legal documents: Unless you're a lawyer, refer them to a lawyer.

This question was originally submitted by an agent through the Big “I” Virtual University’s (VU) Ask an Expert Service, with responses curated from multiple VU faculty members. Answers to other coverage questions are available on the VU website. If you need help accessing the website, request login information.

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Tuesday, June 2, 2020
E&O Loss Control