Alaska’s small businesses need liability protection now

Eric Forrer’s most recent lawsuit to delay state small business grants highlights the difficulties of getting state aid to struggling small business during the COVID-19 pandemic. Again, financial assistance is delayed at a time when small business is struggling survive. State small business grants were on the way to small businesses that either did not apply for federal Paycheck Protection Program loans or accepted less than a paltry $5,000 of assistance. This criterion picks winners and losers. Only a handful of businesses qualify for this lifeline, as Alaska’s economy is tossed by an ever-escalating storm of economic uncertainty. 

Beleaguered government loans and grants are just part of the solution to bridge the gap created by the economic shutdown and devastation wrought by health mandates. Now that Alaska’s economy is working to re-open responsibly, broad-based, equitable solutions are needed to maximize economic recovery and minimize risk to responsible businesses owners. One of the principle and most worrisome impediments to economic recovery is the threat posed to small businesses from frivolous lawsuits asserting liability for the transmission of COVID-19.

State and federal disaster declarations and necessary health mandates have combined to confuse the legal landscape. We hear from businesses owners across the state who want to open their doors but are afraid to because it is unclear what they will be liable for if a customer or employee contracts COVID-19. Small business owners carry all types of insurance to mitigate liability, but they do not maintain separate legal defense funds or design profit and loss models to incorporate costs of litigation. Many Alaskan businesses are choosing to delay their re-open or modify their operations out of fear of insurance gaps and going bankrupt defending themselves from a spurious claim involving COVID-19. 

Large employers, non-profits and some public sector employers are also expressing concerns about litigation emanating from harm caused by COVID-19. Alaska’s leaders have done a good job working together to address health and public safety concerns by issuing health mandates that have the force of law. Small and large businesses and Alaskans as a whole are doing their part to inform themselves so they can comply with government orders.

Government loans and assistance have and will continue to bridge the gaps in economic recovery. However, loans and grants are only temporary measures that are not sustainable in the long run. Economic recovery requires measured, responsible re-opening of the economy.

Now is the time to update Alaska statute and provide liability exemption for all employers who are following government health mandates. Alaska small business owners need peace of mind as they file COVID-19 mitigation plans and invest in necessary equipment and protocols to comply with government orders. NFIB hereby calls upon the state legislature and governor to enact broad based, equitable liability exemptions for injury caused by COVID-19 if the entity is complying with current government health mandates. Let small business owners focus on what they do best: keeping Alaska’s economy running.

Thor Stacey is the State Director of the Alaska chapter of the National Federation of Independent Businesses.

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