Helping clients manage risk is more than selling policies. It is about understanding and anticipating exposures that could derail their coverage, increase premiums, or lead to costly lawsuits. One risk often underestimated, especially by small to mid-sized businesses and commercial property owners, is noncompliance with the Americans with Disabilities Act (ADA)—a legal issue that frequently overlaps with premises liability exposures.
ADA noncompliance and premises liability center around the condition and accessibility of the property for everyone. Structural or design flaws can often impose barriers to those protected by the ADA, trigger ADA lawsuits, and/or create physical hazards to everyone, including those not protected by the ADA, that lead to injury claims. This dual exposure requires careful attention, clear communication, and proactive client education.
The Hidden Risks: ADA and Premises Liability
The ADA carries real legal and financial consequences, but many times clients do not realize or understand that standard general liability (GL) insurance policies typically do not cover ADA lawsuits. These claims are considered intentional acts of discrimination, not accidents or "occurrences," and are therefore excluded under most commercial policies.
Meanwhile, premises liability claims, such as trip-and-fall accidents due to inadequate ramps, broken walkways, poor lighting, or uneven flooring, are typically covered under GL policies. However, if the root cause of an injury is tied to ADA noncompliance, it could blur the lines of coverage. A court or insurer could interpret the exposure as an excluded civil rights issue rather than a standard bodily injury claim.
It is the broker's obligation to educate clients and help them understand that structural compliance issues are not just legal problems, but insurance liabilities.
Best Client Advice
Conduct an ADA and Premises Compliance Audit by a Certified Inspector
The most critical step for clients is conducting a formal accessibility and premises audit. Relying on general contractors or architects to do this is not enough. A certified ADA compliance expert should be brought in to identify ADA violations and physical hazards that could result in injury or litigation.
Audits can mitigate risks by identifying design or maintenance flaws that violate the ADA. These audits demonstrate good-faith effort in compliance, which reduces legal exposure, provides documentation for courts, supports safer premises (which reduces GL claims), and informs custom underwriting for bespoke insurance solutions.
A comprehensive audit is a key element of a risk management strategy. When it is regularly conducted, it helps ensure ADA compliance, improves safety, and lessens the likelihood of lawsuits (both civil rights and personal injury).
Promote Proactive Modifications
ADA compliance is not all-or-nothing. The law requires "readily achievable" modifications to remove barriers (i.e., improve accessibility), directly reducing premises liability risks. Many structural compliance modifications are readily achievable (and needed) because the wrong slope on a ramp or improper curb heights can impose additional barriers, harm customers, and cause irreparable damage to your clients' businesses.
Other easily performed structural modifications include the addition of features to increase accessibility and improve safety, such as restroom grab bars, appropriate counter heights, and improved lighting. If additional, more substantial modifications are needed, a phased, documented plan, with the changes budgeted for in capital expenditures, will improve compliance and show good faith efforts to improve accessibility should an incident occur, significantly reducing liability.
Recommend Insurance Options
While GL doesn't typically cover ADA compliance issues, there may be a supplemental insurance solution. Brokers should be ready to discuss:
• legal expense insurance – Covers legal defense costs in civil or regulatory claims, including ADA and zoning issues. It doesn't cover damages but helps cover attorney fees.
• employment practices liability insurance (EPLI) – Though designed for employee discrimination cases, many EPLI policies offer third-party coverage for customer-based ADA claims.
• custom manuscript policies – Custom endorsements or surplus lines may offer additional coverage in higher-risk industries like hospitality, healthcare and retail. These may include legal defense coverage or special policy wording for accessibility-related lawsuits.
• umbrella or excess liability policies – While these are not a substitute for ADA-specific protection, they typically have higher limits in case bodily injury claims stem from noncompliant-related hazards.
Being proactive about these discussions allows clients to make informed insurance decisions before a lawsuit happens, not after.
Document Risk Management Conversation
Brokers need to protect themselves as well, documenting all recommendations, especially when advising about audits, legal expense coverage, or ADA-related insurance gaps. If a client declines recommended coverage or skips an audit, put it in writing.
Structural Compliance is a Liability Strategy
ADA violations and unsafe premises are easy targets for litigation, but they are an easy fix (and morally imperative) with some foresight. Brokers are uniquely positioned to protect clients from risk through their expert guidance.
ADA and premises compliance are no longer optional; they are smart business, sound risk management, strong insurance strategies, and ethically proper decisions.