Issue 101 - July 2020
Temporary Use of Member Property for Private Business Operations
As the COVID-19 pandemic continues to show little sign of slowing, significant challenges face small businesses and local government agencies.
In an effort to support local restaurants, gyms, and other businesses, and to stimulate sales tax revenues, municipalities across California are permitting dining, retail sales, and other private business operations to occur on sidewalks, in temporarily-closed streets, in parks, and on other public property.
While these activities benefit municipalities and local businesses alike, the movement of business operations from private property into public spaces creates additional liability for member agencies. The following actions are recommended to effectively manage this exposure:
- Issue a permit or other written agreement to each participating business containing indemnification language in favor of your agency. The permit/agreement should also include your agency’s standard insurance requirements including commercial general liability insurance in the minimum amount of $1 million per occurrence/$2 million general aggregate with your agency named additional insured. If alcohol will be served on public property, full liquor liability insurance with the same minimum amounts should also be required. Members should also review their municipal code for any restrictions on the consumption of alcohol on public property.
- Patrons should be separated and protected from vehicle traffic. Ideally, the roadway or other areas where outdoor dining and business activities are taking place should be temporarily closed. If this is not feasible, then concrete K-rail or similar barriers should be installed around areas where patrons are present.
- Require that participating businesses take all necessary steps to identify and mitigate pedestrian hazards, e.g. electrical cords and other trip hazards. In addition, dining areas could be cordoned off with entrances and exits identified, and/or pedestrian traffic directed around the area in use.
- For fitness classes and similar activities occurring on public property, require that businesses obtain liability waivers from each participant with your agency included as a released party.
- Enforce compliance of businesses with all applicable federal, state, and local public health guidance, including the latest guidance from the California Department of Public Health on dine-in restaurants, fitness facilities, and places of worship.
While some agencies are waiving permit requirements for businesses operating on public property, the California JPIA suggests considering alternatives to make the application process less burdensome. For example, consider fast-tracking permit approvals and reducing or eliminating associated fees. This approach provides much needed relief to local businesses while protecting your agency against liability claims arising out of private business operations.
If you have questions or would like additional information, please contact your assigned risk manager.< Back to Full Issue Print Article