New NC Law Provides Liability Safe Harbor

July 15, 2020

North Carolina Governor Roy Cooper signed into law House Bill 118 Liability Safe Harbor on July 2, 2020. The new law creates a limited legal liability for claims arising from COVID-19 for all businesses, not-for-profits, and individuals. HB 118 significantly expands the limited immunity protection that was provided by SB 704, which passed on May 2, 2020.

As businesses and industries continue to make important decisions regarding their reopening, HB 118 provides a layer of safeguard from COVID-19 opportunistic lawsuits while also promoting businesses to act responsibly. The law is “[a]n act to provide limited immunity from liability for claims based on transmission of Coronavirus Disease 2019 (COVID-19).”

Here are highlights of North Carolina’s new Liability Safe Harbor law:

“In any claim for relief arising from any act or omission alleged to have resulted in the contraction of COVID-19, including any claim based on violation of subsection (b) of this section, no person shall be liable for any act or omission that does not amount to gross negligence, willful or wanton conduct, or intentional wrongdoing.”

– Here, ‘person’ is defined to include all natural persons and every type of legal entity. Since HB 118 and SB 704 work together to provide limited immunity of COVID-19 transmission, now all businesses, entities, and individuals are broadly protected from a frivolous or unfounded liability claim of causing the contraction of COVID-19.

– HB 118 indicates that ‘gross negligence, willful or wanton conduct, or intentional wrongdoing’ must result from an act or omission. This typically refers to intent to harm or a complete disregard for safety.

“Every person shall provide, with respect to any premises owned by the person or under the person’s possession, custody, or control, reasonable notice of actions taken by the person for the purpose of reducing the risk of transmission of COVID-19 to individuals present on the premises.”

– In other words, a notice of actions taken to reduce the risk of the transmission of COVID-19 for individuals present on a premise is now required. The law specifically identifies ‘reasonable notice of actions.’

– HB 118 does not state that immunity is contingent on such notice being given or posted.

“No person shall be liable for the failure of any individual to comply with rules, policies, or guidelines contained in the notice required by this subsection.”

– This provision provides that businesses are not liable for the failure of any individual to adhere to the required posted notice. This provides relief to businesses regarding liability for their customers’ actions and enforcement of patrons’ behavior.

“applies to claims arising no later than 180 days after the expiration or rescission of Executive Order No. 116 issued March 10, 2020.” “This act is effective when it becomes law and applies to claims arising on or after that date.”

– The law became effective last week and expires 180 days after the Governor’s executive order (No. 116) declaring NC a state of emergency is no longer active.

“does not apply to claims before the Industrial Commission seeking benefits payable under the Workers’ Compensation Act, Article 1 of Chapter 97 of the General Statutes.”

– Lastly, HB 118 does not provide employers a layer of protection regarding worker’s compensation claims. Worker’s compensation is based on proving an injury occurred on the job, regardless of negligence.

 

To learn how HB 118 affects you or your business, JPS recommends contacting your legal advisor.

To read other JPS COVID-related articles, click here.

Do you and your business need help navigating these changing times? Contact JPS.

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