The Department of Justice (DOJ) has once again postponed its proceeding to amend regulations that would spell out the obligations of retailers, hotels, restaurants, places of entertainment and other businesses to make their websites accessible to individuals with disabilities under the Americans with Disabilities Act (ADA). While current rules give clear, detailed guidance on wheelchair ramps, signage, and other standards for physical structures, they do not mandate the use of specific technological standards to ensure that websites or mobile applications are accessible to disabled individuals. Instead, Title III of the ADA generally requires that “places of public accommodation” ensure equal access to the goods and services they offer. This ultimately leaves it to the courts to decide what measures must be deployed, and parties most often settle these claims. As a result, those businesses that have been waiting on the sidelines to adopt web accessibility solutions after the adoption of rules and timelines now face even greater litigation risks.
In addition, businesses of all types are now being threatened with digital and website accessibility claims. While advocacy groups and individuals are still active in this space, plaintiffs’ lawyers seeking quick settlements have taken up the cause as well. Brick-and-mortar storefront operations have been dealing with this risk for years, but in the last few years, advocacy groups began targeting purely online operations, such as Netflix and Scribd. In the past few months, plaintiffs’ lawyers have cast an even bigger net: lawsuits have been filed against the NBA and the NCAA, among others, arguing that these organizations must change their corporate policies to ensure that their websites are accessible to blind and visually impaired consumers on an ongoing basis.
With the postponement of new rules and increasing uncertainty, businesses of all types will face an ever-growing barrage of demand letters and lawsuits involving web accessibility. In this environment, there are several things businesses can do to minimize exposure if a claim is filed and get ahead of the curve to remediate web-accessibility issues.
Things Businesses Can Do in Anticipation of Web-Accessibility Lawsuits:
1. Make Conscious Procurement Decisions to Utilize Accessible Technologies
If you are in the process of procuring third-party technology for your retail website or mobile app, review the language in your procurement agreements carefully to ensure that the applications already enable accessible technology solutions, can be updated quickly to enable such solutions, and that the vendor provides adequate support for these adaptations. Similarly, if you are in the process of procuring new POS devices, ensure that the device you select enables, or can be adapted to enable, accessible technology solutions.
2. Retain Accessibility Experts
Retain outside legal counsel and a reputable technology vendor specializing in website accessibility to review your website, assess your litigation risk, and assist you in your remediation efforts. Technological assessments can be completed relatively quickly—usually within a month or two—but updates and accessibility-focused fixes can take more than a year to implement throughout an entire website. The assessment should include manual and automated testing. It should also include a review of internal processes: (i) to ensure that continuous website updates and upgrades do not undo any work that has already been done to make your website accessible, and (ii) to sensitize management and in-house web developers to accessibility issues, legal obligations, and litigation risks. Retention of outside legal counsel at the outset of this process is particularly important to ensure that the report generated by the technology vendor may be considered privileged if a lawsuit is pending or threatened.
3. Set a Goal Date to Comply with International Web-Accessibility Guidelines
Although the WCAG 2.0 guidelines have not been adopted in the United States as a general legal requirement, the Department of Justice is likely to incorporate the guidelines into the rules it ultimately adopts and applies to places of public accommodation. The WCAG 2.0 guidelines are already referenced in the rules that apply to U.S. and foreign airlines that market transportation to the public in the United States. Moreover, nearly all of the settlement agreements in recent cases incorporate compliance with the WCAG 2.0 guidelines (Level AA Success Criteria) within a reasonable amount of time. Several foreign jurisdictions have already incorporated these guidelines into their own laws.
4. Implement Internal Procedures to Ensure That Legal and Risk Management Know of All Potential ADA Claims
Businesses should ensure that internal procedures require all employees to immediately notify legal and risk management if a potential ADA claim is made. This is important regardless of how the claim is made. Under some insurance policies, a phone call from a customer on the business’s hotline that alleges discrimination may be a “claim” and thus require notice to a carrier. Under claims-made policies, if a claim is not reported to an insurance carrier during the policy period (or, in some instances, in a short time after the policy expires), all coverage may be lost. Thus, for example, if an ADA claim is made via a phone call on August 25, the relevant claims-made policy expires on September 1, and legal and risk management are not notified until September 5, there is a possibility under certain policies that all coverage will be lost.
How to Maximize Insurance Coverage if Your Company Becomes a Defendant in an ADA-Accessibility Lawsuit
1. Review All Potentially Relevant Sources of Insurance
The first step in determining whether insurance coverage is available is to gather and review all of the company’s insurance policies. ADA claims may trigger many different types of coverage and a business should review its entire insurance portfolio if it becomes the target of an ADA claim. The policy review should include, but not be limited to, the following: Commercial General Liability Policies (CGL policies), Employment Practice Liability Policies (EPL policies), Errors and Omissions Policies (E&O policies), and policies where your company is an additional insured. As discussed below, all of these are potential recovery avenues for businesses facing ADA claims. However, keep in mind while reviewing your policies that case law in this area is in its infancy. If you are unable to assess whether your company has adequate protection after a review of your policies, reach out to coverage counsel and your broker to ensure that you are properly insured.
Standard CGL policies contain two separate coverage grants. The first grant provides coverage for damages that the policyholder becomes legally obligated to pay because of “bodily injury” or “property damages.” Coverage for an ADA claim may be available under this coverage grant if the claimant alleges any emotional distress as a result of the inability to access your website. The second coverage grant in a CGL policy provides coverage for damages that the policyholder becomes legally obligated to pay because of “personal injury” or “advertising injury.” “Personal injury” under a CGL policy often includes injury arising out of discrimination based on a physical disability. Thus, both coverage grants provide potential defense cost and indemnity coverage for ADA claims and should be reviewed. Businesses should also review their umbrella and excess liability policies that sit directly above their CGL coverage since sometimes these policies provide even broader protection.
Businesses should ensure that their EPL policies contain a “third-party liability” endorsement and do not contain ADA exclusions. If purchased, this endorsement provides an extension of coverage that may provide coverage for ADA claims based on discrimination. If your company has a third-party liability endorsement, ensure that it contains a “duty to defend” clause and prior acts coverage. If your company does not have this coverage, speak with your broker to discuss options for adding this coverage grant, either now or at the next renewal.
E&O policies apply when a claimant alleges that the policyholder was negligent in providing services. In some jurisdictions, courts have found coverage under E&O policies and insurers have conceded coverage for traditional ADA discrimination cases. Depending on how the issue of whether a website is a “place of public accommodation” is resolved, all traditional insurance avenues for ADA coverage should be explored, including E&O policies.
Policies Under Which a Company May Be an Additional Insured
In assessing policies that may apply to a future ADA claim, businesses should not forget to look for potential coverage they may have as additional insureds under insurance policies purchased by other companies. Vendors employed by retailers to assist with website design and implementation may be contractually obligated to add the retailer as an additional insured to their liability policies. If the website is determined to be in violation of the ADA as a result of vendor negligence, then coverage may be available under these policies.
2. Notify All Potential Insurance Carriers
As soon as an ADA claim is made, all potentially applicable insurers should be notified in accordance with the procedures and deadlines in the policies. While the consequences of late notice vary based on the jurisdiction and the policy language, this is a coverage dispute that, with foresight, policyholders can and should avoid on the front end by ensuring that internal procedures exist to immediately notify legal and risk management of potential claims. Failure to abide by the policies’ specific notice provisions may bar coverage in some jurisdictions, especially for claims-made policies. However, in many jurisdictions under occurrence-based policies, an insurance company has the burden to show that it was prejudiced as a result of the late notice. If a policyholder is denied coverage because of the late notice, it is best served by having an experienced coverage counsel review its policies and determine whether a viable argument for coverage exists.
3. Watch Your Words
What you say to whom and how you say it may make the difference between a covered and an uncovered claim. It is critical that policyholders are careful in the initial stages when characterizing their claims or discussing coverage with their insurance companies, their brokers, or any outside consultants. This is especially true in an area, such as ADA accessibility, where the case law is in its infancy. There are a number of issues that can significantly affect the existence or amount of an insurance recovery. To maintain a single cohesive message with insurers, businesses should identify one point of contact in the company who will communicate with the insurance companies, along with outside counsel throughout the life of the claim. The policyholder should avoid being bullied into making premature calls categorizing the claim.
In addition to carefully watching what is said to insurance companies, businesses also need to be careful when discussing coverage issues with their brokers or any outside consultants. In many jurisdictions, communications with brokers or outside consultants are not subject to any privilege. Any unprotected communications may be discoverable if a coverage dispute ultimately arises.
4. Demand That Insurers Fulfill Their Coverage Obligations
Policyholders must demand that their insurance companies meet all contractual obligations. They should not accept any denial as final—instead, a denial is often the beginning of the dance with an insurance carrier. If policyholders eventually need to file suit or to arbitrate against their insurer, they should review the policies and determine what steps need to be taken. Some policies contain mandatory waiting periods and mediation or arbitration prior to bringing a coverage suit. Policies may also contain suit limitation clauses that limit the policyholders’ time to bring a suit or notice of arbitration.
Policyholders should avoid letting an insurance company trick them into believing that they are still in negotiations. The time period for bringing a suit either under the language of a particular insurance policy or under the relevant statute of limitations is not automatically tolled while the policyholder is negotiating with the insurance carrier. In some circumstances the policyholder may want to enter into a formal tolling agreement signed by both parties upon receipt of a denial. In other circumstances, where coverage varies greatly depending on the jurisdiction, it may be in the policyholder’s best interest to file suit in the forum of its choice and then stay the proceeding while the parties attempt settlement. Regardless, policyholders should know what the policy requires so they can maintain the pressure on the insurance company and, if necessary, initiate coverage litigation.
5. Update the Insurance Carriers Regularly, and, as Facts Emerge, Determine if Additional Policies May Now Be Implicated
As discussed above, businesses should identify one individual in the legal or risk management department as the point of contact with the insurers. This individual should be tasked with keeping the insurance carriers updated. Most insurance policies contain cooperation clauses that require policyholders to keep the carrier informed on all developments in the case. Failure to inform can potentially lead to a denial of coverage. Further, as details emerge surrounding the case, this individual should constantly be assessing whether coverage has become available under additional policies.
The continued uncertainty on website accessibility has left businesses of all types exposed to increased litigation risk. Businesses should mitigate their risk by both proactively taking steps and ensuring that if they are sued, that they maximize all potentially available insurance coverage.
© 2015 Perkins Coie LLP