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September 3, 2020

ADA compliance: Is it covered by insurance

Scott Chapin

Per the recent article in Bicycle Retail and Industry News, many California-based bicycle retailers received emails and demand letters from a law firm threatening them with suits specific to their websites alleged non-compliance with the Americans with Disability Act and a state-specific statute.

Immediately following the article, we received calls about whether there would be coverage on a bicycle retailer’s insurance policy.  Historically, we have seen many ADA lawsuits for physical location compliance (inaccessibility at the retail location and/or sidewalk) where law firms actually utilize Google Earth to find retailers with potential obstructions at their store front.  The website compliance issue has been less prevalent until recently and may become more common with commerce shifting to online.

Are you covered?
Common Business Owner’s policies exclude coverage for both of these claims scenarios. However, an Employment Practices Liability (EPL) policy may respond, defend and indemnify these type of claim. In order for an EPL policy to provide coverage, it must contain coverage for Third-Party Wrongful Acts.  

Generally, the third-party coverage is only offered on a standalone Employment Practices Liability policy.  Most small businesses do not have a standalone policy due to the additional costs.  Some may have coverage as an endorsement on their Business Owners policy, which typically do not include coverage for Third-Party Wrongful Acts.  We want to make you aware of this potential exposure to your business, and suggest the cost to insure is not as prohibitive as many people think.

What’s next?
If after you review a demand letter with an attorney to better understand the merit of the demand, we recommend submitting the matter to your insurance carrier to see if there is coverage.  

If you have specific questions or are interested in reviewing your current coverage, reach out to your agent or contact me, Scott Chapin, Marsh & McLennan Agency bicycle specialist and risk consultant at 612-759-6350 or

Best Practices for Bicycle Retailers-Service Department 

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Trail Building Organization Risks 

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