The Royal Gorge Route Railroad is a highly visible piece of the Fremont County economy, bringing 150,000 riders and $30 million in economic activity per year to south-central Colorado, owner Mark Greksa says.
Of the many business challenges stampeding through Greksaâ€™s mind these days, one has emerged in recent weeks as a major hurdle to reopening: Liability insurance, specifically the lack of available liability insurance coverage for COVID-19. The absence of such coverage could be a real show-stopper for the railroad, Greksa said, as it could for Coloradoâ€™s ski industry, its restaurants, theaters, beer halls, and basically any business where employees have direct contact with customers.
Greksa is calling on state lawmakers to take action to insulate businesses like his from lawsuits around the coronavirus-caused disease. Itâ€™s becoming clear the insurance industry doesnâ€™t intend to provide that protection.
â€œI think itâ€™s crucial for the state of Colorado that we take action now,â€ Greksa said. â€œOtherwise businesses are going to be very reluctant to reopen and itâ€™s going to be very damaging to our economy.â€
The CaÃ±on City-based railroad is looking to buy a $10 million liability insurance policy after its last provider exited the market. A potential new provider recently added an exclusion to its policies when it comes to covering claims related to COVID-19. At least one other insurer the railroad has checked in with was in the process of writing an exclusion of its own.
Greksa has a workersâ€™ compensation policy that he is confident will cover his employees in the event they contract the illness. Heâ€™s more concerned about bringing them back to work. Some of the staffers he had to lay off after business shutdowns went into effect in March are now facing evictions or relying on government food assistance. His pared-back staff of 40 is floating on a raft of federal Paycheck Protection Program money that runs out in June.
Without liability coverage, though, the railroad is exposed to lawsuits from potential future passengers related to the virus. Even with expanded cleaning protocols, plans to limit trips to fewer than 300 riders on trains that could accommodate 700 people and other safety measures, itâ€™s a risk Greksa says he canâ€™t afford to take.
â€œI donâ€™t want to deal with frivolous lawsuits that take time and money,â€ Greksa said. â€œWhen you have an insurance company that wonâ€™t cover you, you are flapping out in the breeze and that will put any business out of business.â€
Tom Henderson, an attorney with Denverâ€™s Burg Simpson Law Firm who represents policyholders in disputes with insurers, said heâ€™s not surprised to hear of companies moving to build walls in liability policies that exclude COVID-19 coverage.
He speculated that such exclusions could have major impacts on amusement parks, sports franchises and other businesses dependent on bringing masses of people through their gates. He expects that the practice will soon be widespread if it isnâ€™t already.
â€œI would assume that that type of process is in the works, that insurance companies will come up with a more comprehensively worded exclusion because of the concern that gee, that customer-oriented business might get sued,â€ he said.
Denver restauranteur Paul Reilly has been vocal about only reopening his businesses when he has a clear picture of what safe operations amid the pandemic. Right now, he is preparing to file applications with the city of Denver to expand outdoor seating for his restaurants, Beast + Bottle and Coperta, in accordance with new guidelines released this week.
He just renewed his liability coverage in February. If COVID-19 were not part of his coverage, â€œthat would seriously change our business plans,â€ Reilly said. â€œThat sounds like a worrisome scenario.â€
Virus and bacteria exclusions are already part of many policies covering business interruption claims, Carole Walker, executive director of industry trade group the Rocky Mountain Insurance Association, said. Itâ€™s an industry position that has stuck in the craw of many Colorado business owners, including Greksa, but Walker and others say the pandemic is a burden large enough to bankrupt the industry or at least leave it unable to cover other natural disasters like wildfires and hail.
The concern around coronavirus liability coverage is large enough that there has been chatter at the federal level about legislation protecting businesses. At least 26 states have already provided liability protection to health care entities and/or first responders, according to research by Walkerâ€™s organization. Colorado is not among them.
In Oklahoma, the state Senate last week passed a bill that would protect businesses from lawsuits related to the inadvertent spread of COVID-19, though opponents feel it is too broad, according to a report from local TV station KWTV. That measure is now before the state House of Representatives.
â€œAs our businesses are reopening, we need to make them feel secure to do business, especially if they are taking all the right precautions,â€ Walker said.
The appropriate sources for that security are the state legislature or an emergency order from Gov. Jared Polis, Walker said.
Such a bill may be hard to come by when Coloradoâ€™s 2020 legislative session resumes next week. Lawmakers will be focused on addressing a state budget that is now billions of dollars short, school financing shortfalls and other red-alert emergency priorities.
Rep. Tracy Kraft-Tharp, D-Arvada, chairs the Colorado Houseâ€™s business affairs and labor committee. She has heard from people who would like to see the liability issue addressed by the General Assembly but, at this point, she said she is not planning to introduce a bill on that topic.
For one, the issue is already been looked at the federal level, she said. And she feels the key to restarting the economy is consumer confidence. Insulating businesses for liability around coronavirus, even those businesses that might not be following rules and regulations set forth by state and local health officials, sends the wrong message.
â€œI donâ€™t see that that right now would increase confidence,â€ she said.