What Does It Mean to Draft a Liability Waiver?
A liability waiver is a binding contract between two parties that protects against risks in a given activity. The release of liability agreement, also known as a hold harmless agreement, outlines terms and conditions to protect a company from being sued over losses and injuries users sustain while using their products or services.
The liability waiver protects companies from consequences associated with inherent risks — these are risks that naturally arise from performing a behavior or using a product.
Imagine you want to sign up for ice skating lessons. An ice-skating rink may have you sign a release of liability waiver not to hold them responsible for injuries you sustain while ice skating.
The inherent risks of ice skating are ones you choose to take by participating in the activity, and the consequences of those risks are not the fault of the coach or ice-skating rink.
Here is an article that defines a liability waiver in more detail.
What is the Purpose of a Liability Waiver?
Liability waivers protect companies from being held accountable if a participant in an activity or operator of a product is harmed by its inherent risks.
If someone attends a yoga studio, then there are risks they may face by performing yoga on the premises. For example, they could slip and fall, hurt their backs or necks during practice, or sustain another type of injury.
A liability waiver would prevent teachers and the studio from being held responsible if a student gets hurt from pushing themselves too far or having an accident on site.
The important distinction of a liability waiver is that it protects against normal risks associated with the given activity or product. You cannot use a liability waiver to absolve you or an employee from legal responsibility in cases of direct harm.
Choosing what to include in a liability waiver is often confusing for businesses. The best way to assess your risks is to consider what accidents and injuries are most likely to occur from performing an activity you offer participants.
Consider how someone may be hurt using a product or machinery and how their actions could injure them. Slip and fall injuries, for example, can occur at no fault of the company. Still, without a liability waiver, they could face a lawsuit for a person’s medical bills because the injury occurred on their property.
Here is an article with more information on the release of liability works.
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What Should Be Included in a Liability Waiver?
There are several key elements to every good liability waiver. Make sure that you include these in yours to ensure it is both legally binding and comprehensive.
- Inherent risks. Outline the risks associated with the product or service, such as driving a car or dancing at a dance studio. Specify the risks that participants willfully and knowingly assume the risk of participating in your activities. Remember that acts of gross negligence or deliberate harm are not covered under liability clauses.
- Assumption of risk. One of the most important elements of a release of liability waiver is the participant's assumption of risk. By signing the waiver, they acknowledge that the choice to participate is entirely their own and has not been made under coercion or duress. They understand their risks by participating in an activity or using a product. They will not hold the company accountable for damages or losses from those risks.
- Liability release or hold harmless clause. The final provision of a liability release waiver states that the company is not to be held responsible for accidents, injuries, damages, or other losses resulting from the inherent risks outlined in the waiver. Signing the document means that the other party willingly gives up their rights to sue your company should any of these occur.
Here is an article where you can learn more about how to write a liability waiver.
Liability Waiver Templates
Who Drafts a Liability Waiver?
You can use a release of liability agreement template or reach out to a professional lawyer to draft a waiver for you. If you are drafting the waiver independently, it is important to research liability laws in your state. Make sure you are fully aware of your rights and limitations and the terms and conditions you must follow.
A business lawyer can help you draft a thorough liability waiver unique to your circumstances. Because every industry or company has risks, it’s best to ensure you are as thorough and detailed as possible to avoid future lawsuits.
Here is an article with 5 tips on choosing a business lawyer for your company’s needs.
How Do You Write a Liability Waiver?
You can start writing a liability waiver by doing the following:
- Identify your risks. Risks vary by business, so you should research your own and recognize your company's inherent risks. For example, a music studio's owners have more inherent risks than owners of bungee jumping companies. One way to learn is to review liability waivers from other companies.
- Draft your waiver. Research the parts of a liability waiver, such as indemnification and liability release. You can use an online template or write your own, but make sure you use the appropriate format and legal terms to protect your business entirely.
- Submit to a business lawyer for review. Suppose you’re set on writing a liability waiver yourself. In that case, you should submit your draft to a licensed attorney to review. They can make suggestions or revise your document to ensure it fully protects your business and complies with all relevant laws and regulations.
Make sure that you use clear, simple language throughout the waiver. While accuracy is important, simplicity is just as essential. An overcomplicated or high-level legal waiver could be contested in court because a defendant can claim they could not understand their rights when signing the agreement.
In addition, make sure you note both the party’s assumption of risk and your company’s release of liability. These are the two most important aspects of any liability release.
Here is an article that covers the key components of any liability waiver.
How Much Does it Cost to Draft a Liability Waiver?
ContractsCounsel’s marketplace data reveals that the average liability waiver cost ranges from $700 to $2000. Of course, the cost of your waiver will depend on where you live, the complexity of your waiver, and the size of the law firm you work with.
Generally, larger law firms with more experienced backgrounds or reputations charge higher prices. However, you can compare different lawyers’ bids on ContractsCounsel to get the best deal for your needs.
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