Does COVID-19 Pose a Liability Risk for Your Dance Business?
While the risk of a lawsuit is low for those who faithfully follow state and local guidelines, this expert advises taking additional steps to protect your business.
When it comes to reopening your dance business, you’ve probably devoted lots of time and energy to thinking about how you’ll teach socially distanced classes, or how you’ll keep your customers as safe as possible.
What you may not be thinking about? The possibility of encountering a lawsuit, should someone contract or spread COVID-19 at your business.
It’s an unpleasant hypothetical—after all, you’ve worked hard to develop strong relationships with your studio families and customers, and the thought of getting into legal trouble with them can seem unfathomable. Plus, you’re likely taking every precaution possible to ensure that COVID doesn’t enter your space.
But it’s worth preparing yourself for the chance that this could happen. At a recent webinar hosted by Discount Dance, John M. Sadler of Sadler Sports and Recreation Insurance laid out the risks—and how to minimize them. Though Sadler’s advice applies to dance studios specifically, much of it is applicable to other dance businesses, too.
What Are the Risks?
According to Sadler, there are four possible types of negligence allegations that a dance studio could face in a COVID-19 transmission lawsuit:
- Returning to activities too soon and against state and local mandates or guidelines
- Failing to follow mitigation mandates or guidelines regarding reopening procedures and precautions
- Failure to follow your own published guidelines around reopening and risk management
- Failure to notify local health authorities of exposure or transmission at your studio
In other words, as long as you only reopen when you’re allowed to, follow all state and local guidelines around reopening, don’t overpromise on precautions you’ll be taking, and follow proper steps if there’s a case at your studio, you’re probably low risk for a lawsuit.
Plus, any lawsuit filed would have to prove not only that you weren’t following guidelines, but that the case of COVID-19 was contracted at your space—an unfortunately difficult task considering the lack of sophisticated contact tracing in the U.S. and the virus’ sometimes long incubation period.
Sadler also points out that our legal system is extremely backed up due to the pandemic, which could be a disincentive to those filing an already low-probability lawsuit. He is not aware of any COVID-19 lawsuits that have been filed against his sports and recreation clients thus far.
The fact that, overall, most people are so well-educated about the risks of COVID-19 also helps as far as “assumption of risk” goes, says Sadler, or the idea that an individual can’t claim damages because they were aware of the risk of exposing themselves to a known danger.
Currently, legislation giving businesses immunity from COVID-19 claims (as long as safety regulations are followed and no laws are broken) has passed in Oklahoma, Utah and Wyoming, and similar bills have been introduced in other state legislatures. (Though some of these, like North Carolina’s new law, only protect businesses deemed “essential.”)
How to Protect Your Business
Though, as Sadler suggests, the likelihood of a claimant prevailing in a COVID-19 negligence lawsuit at your dance studio is fairly small as of now, you should still do your due diligence in protecting yourself.
For one, have a waiver and release form that specifically mentions COVID-19. This may mean updating your current waiver or creating a new one. (Sadler has a sample here.) All staff members should sign it, as should all students. Sadler recommends that even minors sign their own waiver, along with their parents, or have language in the waiver obligating the parent to talk to their child about the risks before signing.
One liability you probably haven’t had to think about before: spectators. You typically don’t worry about parents in your studio getting a concussion or breaking an ankle, but now everyone who steps foot in your studio is a COVID risk.
You could have spectators sign a waiver and release for themselves, too, says Sadler, or require parents to drop off their students at the door. Either way, have signage throughout your studio with information about the virus and your studio’s guidelines, and discouraging those who are elderly or have compromised immune systems from entering. (Sadler has a sample of what this signage could include here.)
Before you reopen, have a risk-management plan based on local, state and CDC guidelines that’s communicated to your customers. (If the CDC ever contradicts what your state is recommending, go with your state, says Sadler.) Be transparent about everything you’re doing to follow guidelines and stop the spread—but Sadler warns against using words like “safe” so you don’t guarantee a COVID-free zone, since, unfortunately, no one can do that. Instead, focus on how you are minimizing risk as much as possible.
Ultimately, the best protection for your business will be a smart reopening plan that follows guidelines closely and incorporates social distancing, regular sanitization, screening procedures and clear communication. If this still results in a case at your studio, seek advice from local health authorities—and possibly an attorney—on how to properly communicate this to the rest of your customers without violating anyone’s privacy.
What About Insurance?
You might be wondering if your general liability insurance would cover a COVID-19 claim. There’s no easy answer to this question, says Sadler—it will largely depend on the specifics of the case. But, he says, if you don’t have an exclusion for communicable disease, pandemic or virus, you have a much better chance of being covered.
The comments in this article are based on the current situation with COVID-19, which is subject to change, and it is recommended that all studio owners discuss insurance matters with their insurance agent and consult with local legal counsel as to the best way to return to activity.
Lauren Wingenroth is the editor in chief of Dance Business Weekly.
