As States Ease Restrictions, Business Owners Are Concerned About Demand and Liability

Lindsay Cates
Senior Manager, Communications and Strategy, U.S. Chamber of Commerce

Published

May 13, 2020

New data from the U.S. Chamber of Commerce reveals that business owners face big challenges as they begin to think about how to reopen—and in some states, actually begin to implement those plans.

Thirty-six governors have moved to at least a limited reopening plan, and business owners say they are most concerned about lack of demand, and the possibility that they could be sued if safety guidelines are not followed properly or an employee or customer is exposed to the virus.

A survey of 4,500 business owners in South Carolina, done by the South Carolina Chamber of Commerce as part of South Carolina Governor Henry McMaster's task force for reopening, found that almost two-thirds of businesses (64%) are concerned about legal liability issues surrounding workplace safety (OSHA/Workers Compensation), and 62% fear premises liability (exposure to customers).

Protecting employers and employees from lawsuits has taken center stage on Capitol Hill in recent weeks as lawmakers begin to hammer out what should be included in the next round of coronavirus-related legislation. This month the South Carolina Chamber and over 50 state and local partners sent a letter to the members of the South Carolina Federal Delegation, urging their support for legislation that will protect businesses as the state begins to reopen.

A poll conducted by the U.S. Chamber’s Institute for Legal Reform found broad support for liability protections among voters: 61% agreed that Congress should protect many businesses from coronavirus-related lawsuits.

“The fear is that small businesses will do all of the right things that the public health officials tell them to do, and then someone gets sick and contracts COVID-19 and sues the employer,” said Neil Bradley, executive vice president and chief policy officer of the U.S. Chamber of Commerce, on a call with reporters in May.

While liability issues are increasingly top of mind, business owners fear that making money will be tough with safety restrictions in place and consumer demand uncertain.

About half (47%) of businesses say lack of demand is their biggest challenge, according to the COVID-19 Business Survey released last week by the South Carolina Chamber. That number is similar to findings in the latest MetLife and U.S. Chamber of Commerce Small Business Coronavirus Impact Poll, which revealed that 54% of small business owners are concerned about their ability to generate revenue.

Not having enough customers or demand to generate revenue is especially daunting for businesses in states with reopening guidelines where customers can return at only 25% or 50% occupancy levels, Bradley said.

However, both recent polls show that businesses are finding ways to adapt to the challenges brought on by the coronavirus pandemic.

The South Carolina Chamber’s survey found that about half (48%) of businesses have still been able to operate with partial continuation of sale and delivery of their services/products using alternative approaches throughout the pandemic.

The MetLife and U.S. Chamber poll found that small businesses are increasingly adapting their operations. One in five (20%) small businesses say they have transitioned employees to teleworking (up from 12% last month), and 17% reported they have transitioned their retail presence to be more virtual or digital (up from 10%).

Both polls reveal that about a third of small business have made an effort to take advantage of coronavirus relief aid provided in the Coronavirus Aid, Relief, and Economic Security (CARES) Act.

One third (32%) of small businesses report having applied for, or having tried to apply for, a Paycheck Protection Program (PPP) loan from the U.S. Small Business Administration, according to the Metlife and U.S. Chamber poll; while 33% of the businesses surveyed in the South Carolina Chamber poll said they had successfully obtained a PPP loan.

Half of businesses in the South Carolina Chamber survey said the governor lifting his orders is what they would need most to restart and bring employees back to work fulltime, and close to 4 in 5 businesses said they anticipate placing a heightened focus around employee handwashing, distancing, and additional cleaning and disinfecting of the workplace.

Since the survey was taken, South Carolina officially began loosening restrictions on travel, commerce and recreation on May 4.

“Governor McMaster lifting the Home-or-Work Order will go a long way toward helping them get back up to operational status, but we must continue to keep the focus on reopening the economy safely for our businesses and employees,” said SC Chamber of Commerce President and CEO Ted Pitts.