Spooky Business Insurance Risk: ADA Lawsuits

Posted by John Cofini on Tue, Oct 21, 2014 @ 05:18 PM

business insuranceAre you ready for the season of ghosts and goblins? As a business owner, you don’t have to wait for Halloween to roll around to find things that go bump in the night. You deal with spooky risks all year round. And there’s a growing and particularly ghoulish risk you need to be on the lookout for: ADA lawsuits.

Employers have had to contend with the Americans with Disabilities Act (ADA) for years, and the law is most commonly cited in reference to the employer-employee relationship. But the ADA also requires public buildings and facilities to meet certain accessibility requirements, including rules about signage, curbs, parking spaces, height of service counters, and size of restrooms.

Unfortunately, that portion of the law has become a cash cow for plaintiff attorneys – and a house of horrors for businesses, restaurants, bars, and hotels. Many targeted businesses have been forced to close down, lay off employees, or seek bankruptcy protection.

If you own, lease, or operate a place of public accommodation and are in violation of the ADA, you could quickly find yourself in the crosshairs of this grim reaper.

Here’s the most common scenario…

A disabled individual, either on his own initiative or at his lawyer’s direction, will scope out a business to see whether it’s ADA compliant. If it’s not, the disabled individual will report back to his or her attorney, who then files a lawsuit. In most cases, the business won’t receive a demand letter or any other advance warning because plaintiff’s attorneys don’t make any money if the business voluntarily agrees to fix any violations. And since Title III of the ADA allows the prevailing plaintiff to recover attorney fees, defending these lawsuits can quickly drain the life out of a business owner’s profits.

This growing menace is threatening states across the country. Here in New York, the Lawsuit Reform Alliance of New York recently warned of the coming flood of ADA litigation targeting New York businesses.

How do you protect yourself from this menacing risk?

Your first line of defense is to know the most common ADA access violations, and make sure your business is ADA compliant. Attorneys, architects, and other consultants can help audit your business for compliance. Here are the top 10 violations you need to be aware of: 

  1. Signs: Outdated or incorrect signage
  2. Parking: Slope too steep or wrong dimensions
  3. Access Routes: Wrong signs, steep slopes or other hazards
  4. Curb Ramps: Steep slopes
  5. Pedestrian ramps: No handrails, landings not level, or no ramp
  6. Bathrooms: Too small or fixtures out of reach
  7. Stairs: No hazard striping or handrails, rails at wrong height, or uneven steps
  8. Seating: No access for people with disabilities
  9. Doorways: Clearance issues or improper door handles
  10. Exits: No exit or no signs showing exits

Second, you should review your lease to determine exactly who is liable for ADA violations. Many lease agreements include indemnification provisions.

Finally, check your insurance coverage to see whether you’re covered for ADA violations. If you’re not, you’ll be fighting this scary risk on your own.

For New York business insurance coverage designed to ward off these and other spooky risks, talk to the experts at BNC Insurance and Risk Advisors

Tags: business insurance, new york business insurance, New York risk management, ADA lawsuits