A Public Health Framework for COVID-19 Business Liability

32 Pages Posted: 21 May 2020 Last revised: 31 Aug 2020

Date Written: May 20, 2020

Abstract

Businesses that reopen amid the COVID-19 pandemic face potential legal liability to customers and workers who contract the coronavirus through those enterprises’ operations. Federal and state lawmakers are actively considering proposals to narrow or expand such liability. These proposals have important economic and public-health implications. This article presents an analytical framework for evaluating liability regimes in the context of a communicable disease. The framework highlights the contrasting public-health consequences of liability before and after a customer or worker is exposed to the virus. Ex ante (before exposure), potential liability generates incentives for businesses to take precautions that reduce the risk of virus transmission. Ex post (after exposure), liability fears may deter businesses from proactively informing customers and workers that they have been exposed to the virus through the business’s operations. To minimize the potentially perverse ex-post consequences of liability without sacrificing significant ex-ante benefits, we propose a limited safe harbor from liability for businesses that promptly contact customers and workers after learning about a possible exposure. The article also suggests changes to workers’ compensation rules that seek a balance between ex-ante benefits and ex-post costs.

Keywords: COVID-19, SARS-CoV-2, coronavirus, liability, tort, workers' compensation, safe harbor

JEL Classification: I12, K13

Suggested Citation

Hemel, Daniel Jacob and Rodriguez, Daniel B., A Public Health Framework for COVID-19 Business Liability (May 20, 2020). Northwestern Public Law Research Paper No. 20-10, Northwestern Law & Econ Research Paper No. 20-05, U of Chicago, Public Law Working Paper No. 746, University of Chicago Coase-Sandor Institute for Law & Economics Research Paper No. 908, Journal of Law and the Biosciences (Forthcoming), Available at SSRN: https://ssrn.com/abstract=3606396

Daniel Jacob Hemel (Contact Author)

University of Chicago - Law School ( email )

1111 E. 60th St.
Chicago, IL 60637
United States

Daniel B. Rodriguez

Northwestern University - Pritzker School of Law ( email )

375 E. Chicago Ave
Chicago, IL 60611
United States

Here is the Coronavirus
related research on SSRN

Paper statistics

Downloads
367
Abstract Views
1,910
rank
89,485
PlumX Metrics