Landlord Policy and ADA Claims

[sludgesurfer1]

Hey everyone, I know this might be an oddball situation but perhaps someone out there might have experience with this.

Commercial property landlord has basic Lessors Risk policy with all the typical stuff in place. However, building does not have a handicap accessible ramp. A customer in a wheelchair attempts to enter the building but cannot. Customer sues landlord as well as the business for violations on the American Disabilities Act. Alleges discrimination against people with disabilities and is now asking for $$$ damages.

Landlord submits a claim to the insurer, and requests that insure tender coverage, Duty to Defend. Insurer says no. The client must now pay a lawyer experienced in ADA defense to fight this down, but most likely will have to pay a settlement to the other party.

Question: does anyone know of any Landlord style policy that has an Endorsement to cover ADA related liabilities?

The business owner thankfully had EPLI endorsed with 3rd parties included, so they actually had coverage. But the landlord is hosed.

I figure I'd throw this out there to see if anyone has touched this issue and found coverage for Lessors Risk policies through any insurer out there. I figure it would be a smart talking point for future clients...

 

[Accelerated]

I have never run across such coverage, but I have run across similar scenarios when handling the representation for various carriers during litigation.

Depending on the state, the suit could be considered frivolous, and further, the "customer" could end up liable for the costs of the insured's legal costs.

Most of the states and municipalities in which I have had to deal with such situations have essentially stated that all new construction must have whatever the current flavor of the day (read: law/regulation) happens to be, such as wheelchair ramps, sewer cleanout access points and what have you. Existing structure owners are usually advised of but not directed to comply with the new code. In the scenario laid out (which is the most common), only if they improve the access points to the venue would they be required to install the wheelchair access ramps. That said, some states are different, and I could easily see NY or CA mandating that everyone anywhere have wheelchair access ramps. Usually though, mandates such as this only apply to "public use" areas, such as pools, recreation centers, shopping malls and so on. If it is a strip mall rather than a stand alone structure, for example, it would likely be required to have the ramps installed.

Ultimately, the only reason that the "customer" would be able to (legitimately) seek monetary damages would be if they were injured as a direct result of no ramp being installed, or if they could somehow demonstrate that they lost money by being unable to access the venue (unlikely). Beyond that, the "customer" (and their attorney) is probably hoping that a settlement will be offered to stave off legal fees. Generally, it costs about $30,000 to defend a suit, even a small one with little complexity. The "customer's" attorney is likely aware of this and is hoping for a settlement of $20,000 or so, simply because it is cheaper to pay the money than to defend a frivolous suit and try to collect your legal fees afterward.

Hopefully they are in a state that does not recognize "pain and suffering", but these days, you never know.

 

[Milkman1265]

dont quote me on it, but i believe NY is all NEW construction has to be up to handicap accessible and if its more than X amount of units.

this sounds like the scam in ny where this wheel chair guy went applying for jobs everywhere and when they rejected him he sued. he won like 20 cases.

 

[VolAgent]

Did the tenant renovate the building at all when he took possession?

 

[greatfish]

I'm in CA and have had a few insureds with these claims. All where paid out under EPL.
I have recently heard about an ADA insurance program from SullivanCurtisMonroe I have not tried it yet but it is the only one that I have heard about. They are a broker in southern california. You should be able to google and call them. Hope that helps.

 

[Milkman1265]

can someone go further into detail regarding ada claims...

from my take, it sounds like the ADA act comes into play if a business/building doesn't have accessible can just be sued?

 

[sludgesurfer1]

Did the tenant renovate the building at all when he took possession?

Actually, the tenant did not renovate as it's a small retail site in a small strip of old buildings. It's an old building near the beach of about 1600 square feet, in the state of California. The interesting thing is that the store is a women's clothing store geared towards 20 somethings and little cocktail dresses, etc. So a 60 year old handicapped guy might not be the target customer for such a store. LOL!

The business owner has nothing to worry about because she had EPLI with 3rd party endorsement.