Georgia liability law passing high insurance costs down to consumers

ATLANTA, Ga. (Atlanta News First) – With a murder a week and crime rates 18 times the national average in 1995, East Lake Meadows in Atlanta was once a public housing community infamously referred to as Little Vietnam; acclaimed filmmaker Ken Burns even produced a documentary about the troubled community.

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Columbia Residential, a real estate company providing mixed-income and affordable housing with nearly 50 properties in Georgia, primarily in metro Atlanta, took over East Lake Meadows’ 542 units several years ago, and rechristened it the Villages at East Lake.

But the neighborhood is still considered one of the Atlanta Police Department’s highest crime zones, and Laurel Hart, Columbia’s vice president of asset management, said a Georgia law holds that against them.

“Regardless of what we do, if we have a business that is located in a high crime area, we’re responsible for any crime that happens on our property or near our property,” said Hart, referring to Georgia’s premises liability law which stipulates a property owner is responsible to take ordinary care to protect people on their property.

That law has landed many businesses and their insurance companies in court, paying millions of dollars. While Hart didn’t disclose how many potential lawsuits Columbia has settled over the years, she said its spends millions on security measures and it is still not enough.

“We want to be good neighbors, but I don’t think anybody can stop crime from occurring.” Hart said. “At some of our properties, like our (Senior Residences) Mechanicsville property, we spend close to $1 million on security each year in addition to insurance.”

Columbia Residential also staffs three monitoring officers on duty around-the-clock; provides rent-free apartments for police officers; and has security entrance and exit gates around the property. But aside from calling police, Hart said Columbia cannot stop a person from tailgating at their security gate onto the property; prevent tenants from having guests; or physically remove a person from the property.

Businesses like Columbia Residential and insurance experts argue the law is driving businesses out of high-crime areas and Georgia altogether, but is also making insurance coverage more expensive, if it can be obtained at all. They said the law discourages developers like and businesses like Publix, Kroger, and CVS from investing in Georgia.

CVS recently made headlines in a $43 million premises liability verdict after an Alabama man was shot and injured in a southeast Atlanta CVS parking lot. According to court documents, the man was driving through Atlanta and stopped at the CVS to sell an iPad, when he was subsequently robbed and shot. Employees testified the store had been robbed before and that CVS had previously removed security guards.

Under the premises liability law, the Georgia Supreme Court upheld a verdict finding CVS 95 percent responsible for not taking reasonable action – such as safety measures like security guards, gates, and cameras – that could prevent a foreseeable crime based on previous incidents.

Another case tried in 2023 involved a man who was shot and killed trying to stop a vehicle theft at the Avalon Mobile Home Park in Jonesboro. A jury awarded his daughter $31 million under Georgia’s premises liability law.

According to law articles, the man was an undocumented immigrant staying with his brother at the mobile home park, but had been asked “multiple times” by the property owners to leave. In the incident, someone was attempting to steal the vehicle he was borrowing from a neighbor when he approached the robber with a gun drawn and was shot and killed.

The plaintiff’s attorneys argued the mobile home park was aware of 10 years of past crimes on the property and had a duty to protect people. The mobile home park’s representatives offered $25,000 to settle, but the plaintiff counsel took the case to trial. State records show the mobile home park filed for bankruptcy later that year.

Atlanta News First Investigates made several attempts to reach the mobile home park owners, but did not receive a response.

What the law says

Georgia’s premises liability law states “Where an owner or occupier of land, by express or implied invitation, induces or leads others to come upon his premises for any lawful purpose, he is liable in damages to such persons for injuries caused by his failure to exercise ordinary care in keeping the premises and approaches safe.”

The law is designed to protect people who enter a business or property and are injured by another person who was invited. However, property owners also are responsible for safety measures to keep the uninvited out.

Past rulings since the 1990s have also defined this liability to be founded upon the foreseeability of harm.

But those definitions aren’t clear to businessowners. In the CVS case, the terms “totality of circumstances” became the basis of this law for a jury, meaning they must decide if all of the factors lead to the property owners’ negligence.

Would an eviction filed in the court be enough to consider a person uninvited? According to Hart, it isn’t. Their issues have gotten worse since the pandemic’s national eviction moratorium.

“We cannot go in and physically remove them from the property,” Hart said. “We have to wait for the sheriff to come and remove them from the property. And the backlog in Fulton County has been a year and a half to 18 months to evict somebody who has been determined to not be a good tenant.”

Cost of litigation

Even if a business and its insurance company do not feel they are liable for an injury, many are settling out of court because that cost to settle could be smaller than what a jury might award.

“Between $300,000 and $750,000 of attorney’s fees is not uncommon, and that would be on top of what they would consider to be a nuisance value settlement, which is usually between $300 and $400,000,” Hart said.

Andy Siegel, national director of Independent Insurance Agents of Georgia, said the limit of liability on a policy is typically what the injured party’s attorney will demand.

“One of my insurance companies mentioned that a woman was accosted at Lenox Square, taken across the street and raped at an office building they insured,” Siegel said. “This is in the evening while the building was closed. The insurance company had a $10 million limit of liability on that building, and they were offering up $2 million just to make it go away, because they were afraid of the Fulton County jury coming back and offering up the $10 million.”

“Everybody can just see it on the billboards,” Mike Iverson, vice president of Oak Bridge Insurance Group, said.

Iverson has also been testifying before lawmakers on behalf of businesses for years as he sees insurance coverages continue to drop and costs skyrocket. During a February 2024 appearance before the Georgia House judiciary committee, Iverson said, “nationwide, small markets have made the decision to discontinue writing grocery stores gasoline stations liquor stories motels hotels and will non-renew all of these policies over the next year.”

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Another issue industry experts believe is driving up the cost of litigation is third-party litigation financing, where entities advance money to plaintiffs (victims) in a lawsuit to fund the litigation costs of suing. These entities include privately held companies, publicly traded companies, and hedge funds and are not required to be disclosed in court.

Effects on high-crime neighborhoods

In the last year, at least two gas stations in Atlanta closed, citing safety issues.

Racetrac, located at 120 Piedmont Avenue, announced its closure in February the day after a 21-year-old was shot and killed on the property and four months after a 19-year-old was shot and killed and three others injured across the street. Days after the announcement, the family of the 19-year-old killed sued the gas station and the student housing dorm across the street under the premises liability law, claiming they did not do enough to protect patrons.

L. Chris Stewart, a trial attorney representing the 19-year-old’s family, said RaceTrac was aware of the repeated dangers at the location and could have hired an off-duty police officer as security.

“No accountability: that’s been the common thread at many gas stations in our city, at many apartment complexes in our city,” Stewart said.

In May, a QuikTrip in Midtown closed, stating the gas-less convenience store did not “meet performance metrics and expectations around customer and employee safety.”

Industry experts say grocery stores and pharmacies are pulling out of high-crime areas and choosing not to expand in those areas.

A Google maps search for a Target and Publix in Atlanta shows primarily all stores north of the city, with none in South Atlanta within the Perimeter of I-285 and I-75 to almost I-20.

Neighborhoods that lack establishments that provide essential goods are considered “food deserts.” For those remaining in higher-crime neighborhoods, the cost to live may also be higher.

“We insure a client who has apartments,” Siegel said. “The complex near the Battery, where the Atlanta Braves play now, has limited exposure for assault and battery coverage on their umbrella policy. The same owner owns apartments near Grant Park; we couldn’t even get them liability coverage in the standard market because the crime score in the neighborhood was too high.

“The everyday person pays more in rent, more in food, more for everything they buy.”

For that same apartment at the Battery, Siegel said they had originally quoted insurance umbrella coverage at $25,000, but by time the complex was built, it was $70,000, “because the company that first wanted the insurance decided not to take on $25,000 of exposure,” he said. “That extra $50,000 premium was spread out amongst every person who lives in that complex.”

But for affordable housing providers like Columbia Residential, that’s not an option.

“We have rent caps, so we don’t have the ability to increase rents to cover the costs of additional security due to higher crime rates in the state of Georgia, coupled with the cost of insurance,” Hart said. “In Georgia, we’re seeing not only an exodus of insurance carriers making it hard to even get insurance, but an exodus of developers like Columbia that are here not just to make money, but to do good.”

Why premises liability laws are important

Matthew Stoddard owns the Stoddard Firm, a personal injury law practice in DeKalb County, and a member of the Georgia Trial Lawyers Association. About 40 percent of his firm’s cases are based on premises liability, mostly involving sex trafficking.

He said Georgia’s premises liability law holds hotels accountable for facilitating sex trafficking.

“The hotels know what’s going on,” Stoddard said. “They have a duty to guest to try to prevent it, not to continually sell rooms to pimps, that they know are using the rooms to sell sex. The hotels are profiting off minor sex trafficking victims because the proceeds from the sale of sex are being used to rent the rooms.”

One case settled last summer involved nearly a dozen alleged sex trafficking victims – some of whom were minors at the time – who accused a Red Roof Inn in Smyrna and the Red Roof Plus+ Atlanta-Buckhead of violating state and federal laws by failing to prevent, and even benefitting from, sex trafficking taking place at their hotels between 2009 and 2018.

According to a court’s opinion case text, the defendants claimed the hotel manager received drugs to be a lookout, and that employees also benefitted from the services. In testimony listed in a case study opinion, employees also said they were instructed by hotel management to book rooms for suspected prostitutes in the back of the motel.

In a statement to Atlanta News First Investigates, The Red Roof Inn said, “Red Roof denies and will vigorously defend these allegations, and condemns sex trafficking in all forms. Red Roof mandates the globally recognized PACT training module to help educate hotel staff to identify and report human trafficking to the authorities.”

The case’s settlement amount was undisclosed.

In 2024, state Rep. James Burchett (R-Waycross) sponsored HB 1371, to amend Georgia’s premises liability law with a new section which would add “reasonably foreseeable based on the totality of the circumstances” into the law.

During a judiciary committee hearing on the bill, Burchett, a partner in the law firm of Burchett & Kemp LLP, posed the question: “If you have a business and you have a crack house with gangs and guns and all kind of stuff going right next door to it, do you think that it would be reasonable to put a fence up?”

Burchett said business owners would say, “That’s not on my property,” which is part of the problem.

Burchett’s bill – which did not pass – also would have clarified feasible safety measures to include “providing security or surveillance, lighting, notice or warning of crime or dangerous conditions, or such other safety measures,” and would have stipulated a high-crime area is not sufficient to establish liability.

Dan Snipes represented the Georgia Trial Lawyers Association at the hearing and said his organization supported the bill. He explained that if something happens across the street, businesses are on notice to take reasonable steps to keep people safe.

A group of Georgia senators also proposed SB 187, entitled the “Georgia Landowners Protection Act,” which would have narrowed premises liability to the legal boundary of their property.

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“The insurance companies are the ones deciding whether to settle and whether to pay and hiring the lawyers, so if you get a nuclear verdict (a payout of more than $10 million), what you’ve got is an insurance company that decided not to settle,” Stoddard said. “Medical bills have been increasing significantly at higher rates than inflation and it’s not difficult to show $3 million, $4 million, $6 million in future medical bills for someone who’s paralyzed.”

Stoddard said businesses should hire off-duty police officers and private security who not only patrol, but also speak up when they see something.

Governor’s efforts to address costs to consumers

On average, Georgia residents pay a tort tax of about $1,370 a year, a cost passed down to consumers when companies are forced to raise prices to afford rising insurance costs because of premises liability lawsuits, insurance experts said.

The American Tort Reform Association (ATRA) named Georgia the nation’s number one judicial hellhole for nuclear verdicts.

In a recent article, the Georgia Public Policy Foundation said, “Part of what moved Georgia to the top of ATRA’s rankings was the infamous Gwinnett County case in which a client was awarded a stupefying $1.7 billion in a case against Ford Motor Company that ARTA notes was “riddled with ethically questionable events and severely biased court orders.”

The Georgia Court of Appeals scrapped the verdict, stating in a November 2024, opinion, “We are… compelled to conclude that the trial court was not authorized in these circumstances to sanction Ford by imposing issue preclusion sanctions, and we must reluctantly vacate the jury‘s verdict and the resultant judgment and remand for a new trial.”

The ATRA ranking also prompted the Insurance Information Institute to launch a statewide campaign against what it calls “legal system abuse.”

While Georgia ranked the number one state for business by Area Development Magazine in 2024, costs for customers and residents are going up in order for businesses to afford their overhead.

“The unfortunate reality is our current litigation climate has led to increased costs for consumers and a higher barrier to entry for those who want to create jobs in our state,” Georgia Gov. Brian Kemp said during an October 2024 roundtable discussion on civil litigation and its impact on the state.

Kemp’s efforts began with the passage of the Data Analysis for Tort Reform Act (HB 1114) last year which required the state’s Office of Commissioner of Insurance and Safety Fire (OCI) to collect insurance claims data evaluating the cost of litigation for companies and, ultimately, consumers.

The commissioner’s report, released on Nov. 8, found the majority of claims fell under auto liability, but most payouts more than $500,000 all fell under business liability.

The report also found:

• A 25% increase in claims frequency comparing claims between 2014-2018 and 2019-2023.
• The average claim payout has risen, increasing the financial burden on insurers and policyholders.
• The number of large losses over $1 million has steadily increased year by year.
• 40.6% of the totality of claims analyzed had legal involvement, while 71.7% of paid indemnity fell to this group.
• One comment from an insurance company submitted in the report states, “Plaintiff lawyers are… bringing in outside investors that try to influence (and capitalize on) the litigation process… creating a disconnect in what ought to be fair and reasonable compensation for a legitimate loss.”

Is 2025 the year for reform?

Industry experts said the CVS ruling sent a terrifying message that the premises liability law, as it is written, is detrimental to Georgia’s business future.

“The Supreme Court issued decision said, ‘Under the law, we have to find against the pharmacy. However, we think this is an area that the legislature should consider and look at and take action.’ You don’t see courts do that very often,” said Arthur “Skin” Edge, a tort reform lobbyist.

“The court is basically begging the Georgia legislature to take action.”

In the ruling, judges expressed concerns with the law.

“I am concerned about the impact these laws have on those who reside in such ‘high crime areas’ and who could face the harsh and mounting reality that businesses—faced with an increased exposure to liability because of the very area in which they have chosen to do business—will cease operations or raise their prices to offset the costs of additional security measures,” wrote Justice Shawn Ellen LaGrua.

“And I wonder how these forced business decisions will impact the residents who would lose ready access to resources they need for daily life because they are no longer available or affordable,” LaGrua continued. “I would urge our General Assembly to consider these issues as they institute laws imposing premises liability on businesses in this State.”

“That tells you how serious situations have become,” Edge said.

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The OIC reform recommendations look at how other states’ have tackled the issue. For example, Florida’s historic tort reform in 2023 required the creation of “best practices” for owners to spell out what security measures an owner needed to take in order to be found not liable in for third-party crimes.

The OIC also recommended capping non-economic damages, such as pain and suffering, to reduce nuclear verdicts and ultimately lower insurance costs.

Stoddard said if insurance companies don’t pay for the medical bills of those injured on a property, he believes the cost will still fall on the taxpayer.

In its closure announcement, QuikTrip noted its mission to help communities in which it opens stores: “QT is taking a different approach than many in the industry and retail sector when addressing public safety issues. We are trying to take a comprehensive approach to create meaningful change in the communities where we operate, including Atlanta. That is why we work with local community organizations that positively impact underlying issues, often at the heart of public safety concerns such as homelessness, addiction, and strengthening youth services. We are also investing in supporting local law enforcement and first responders in the communities where our employees and customers live and work.”

Columbia Residential also partners with local organizations such as the YMCA to connect the community with resources.

“There should be an incentive to do what Columbia does,” Hart said. “We should have an incentive to put cameras up, to do the gates, to do the guards like we do, for every property owner. But if it doesn’t make a difference in terms of why you’re liable, you may see some people just quit doing it.”

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