While the stretcher appeared to be carrying a body, in fact the unusual shape was created by a head pillow under the blanket, Russell said.
He said the error happened because his driver was driving a hearse, which has no equipment to restrain a stretcher. Normally a specialised vehicle has equipment that would lock the stretcher in place and prevent such incidents.
Russell apologised to those who saw the incident and said the "very, very upset" driver was receiving counselling.
"We're very devastated at the fact of this happening, because it is frightening for people."
The hearse will be assessed to ensure the door works properly and the funeral home is reviewing its procedures "to make sure this can never ever happen again", he said.