Risk Management In The Era Of COVID-19

One of our biggest challenges in dealing with COVID-19 is adapting traditional methods of limiting liability and risk transfer to our new environment.

Contracting parties have long looked to provisions such as force majeure, limitations of liability, and indemnification to help manage risk.

Here, let’s examine special considerations for those risk-avoidance mechanisms in the COVID-19 era.

Black’s Law Dictionary defines “force majeure” as “an unexpected event that prevents someone from doing or completing something that he or she had agreed or officially planned to do.

The phrase includes both acts of nature (e.g., floods and hurricanes) and acts of people (e.g., riots, strikes, and wars).” Parties use force majeure clauses to plan for catastrophic events. We can look back 100 years to see how courts have specifically addressed past pandemics.