There are an increasing number of California small businesses, restaurants, and other public access buildings whose owners are being plagued by lawsuits based on supposed violations of the Americans with Disabilities Act (ADA), which requires that all disabled persons should have the same access to public buildings as other people.
As with any issue, there are two sides to the situation, the first being that all these businesses are being frivolously slapped with lawsuits for the purpose of garnering financial settlements, rather than pursuing a reasonable path to achieve compliance with the access laws. The opposing view holds that the flurry of lawsuits has indeed accomplished its purpose, having made California one of the ‘most accessible states’ in the union, in terms of entry for disabled persons.
CHAMPION OF THE ANTI-LAWSUIT FACTION
One of the most vocal opponents of the proliferation of ADA-based lawsuits is state Representative Ken Calvert, who was himself a small business and restaurant owner before taking office. Calvert has introduced a bill into the state legislature known as H.R. 241, although its official title is Compliance for Customer Entry to Stores and Services, which would actually amend the ADA. This proposal would require a disabled person who felt that an ADA violation had occurred, to notify the business owner of the access problem, and allow a specified amount of time for the situation to be corrected before any kind of litigation could be pursued.
Attorney Tanya Moore is a disability rights lawyer who practices in San Jose, CA, and vehemently disagrees that the number of lawsuits is out of control, and that they are frivolous in nature. Ms. Moore contends that H.R. 241 would not accomplish its intended result, and that legislators would spend their time better by enacting legislation which recommended that store owners voluntarily fix access problems.
However, information provided by the CCDA to the state legislature in 2015 made it obvious that the vast majority of disability lawsuits – more than 70% – were actually initiated by the same six California firms, and a whopping 40% were filed by just two of those firms. This of course gives rise to the possibility that the motivation for pursuing a number of such lawsuits might have more than a little self-interest for those firms.
AVOIDING THE RISK OF DISABILITY ACCESS LAWSUITS
No business owner wants to be hit with a lawsuit seeking a hefty financial settlement for a client who feels that his rights have been violated. This makes it important that all small businesses have insurance which covers just such scenarios, so as to reduce the exposure to catastrophic loss which could put a company out of business. To extend the thought, any insurance company which has a relationship with such a business owner would likewise want to avoid the crippling cost of a lawsuit settlement, so it is really in everyone’s best interest to ensure that there is little or no vulnerability to such lawsuits.
ARE YOU COVERED FOR ADA LAWSUITS?
The big question mark with so much increased lawsuit activity is how your business is covered. It’s likely that you already carry a general liability policy that covers any bodily injury claims. The vast majority of ADA claims relate to physical pain, discomfort, and emotional distress – often related to being unable to use facilities, including bathrooms easily.
In many cases, a general liability policy will cover a lot of these claims and your insurer will defend the claims and pay the damages. But there is not always an obligation to do so under some policies, and the more difficult issue here is whether the insurance will cover remediation costs to make the necessary repairs to get a business to full compliance with state and federal laws. There have been some court cases pertaining to the coverage of these types of costs by general liability, but there is no hard and fast ruling in California on the subject.
Other policies you have that may cover such claims and remediation include umbrella policies which often contain discrimination and humiliation that a CGL doesn’t cover. Some Errors and Omissions policies have been used to cover these types of claims as well, and Employment Practices Liability Insurance can be used to cover ADA claims by both employees and some third parties. Keep in mind, however, that the latter often excludes remediation costs.
The prudent thing for any business owner to do is to retain the services of a Certified Business Access (CBA) specialist, who can determine if a given location is actually in compliance with regulations regarding access to public buildings. Where there are questions about accessibility, measures should be taken to resolve any gaps in compliance. There will of course be a cost associated with a professional evaluation like this, and even more if any kind of modifications are needed for compliance, but those costs will certainly be far less than the cost of paying off a court settlement in a lawsuit.
Learn more about General Liability policies and whether yours offers what your business needs to ensure coverage of ADA-related lawsuits.