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If your products or services carry risk, then your company should use liability waivers as necessary. However, liability waivers must contain specific elements for them to remain enforceable.
Here’s everything you need to know:
What is a Liability Waiver?
Liability waivers, also known as waivers of liability, release forms, and hold harmless agreements , are legally binding documents. A participant, such as a customer or an employee, accepts risk and agrees to waive the company’s liability for damages associated with inherent dangers. The limitation of liability insulates the company from civil damages if the participant suffers from losses or injuries.
Why Use a Liability Waiver?
The most significant reason to use a liability waiver is that businesses can protect themselves from damages claims and lawsuits associated with inherently risky activities. This level of protection can shield your profitability and company reputation as well as avoid unnecessary legal disputes.
For example , if you run an driving range where people come to hit golf balls, there is inherent risk in consumers participating in this activity. They may slip and fall on one of your mats, another customer may get hit by a stray golf ball, or a customer could walk into the backswing of another customer. You will want to have guests sign a liability waiver while paritipcating to make sure you are protected should anything go wrong.
Here is wikipedia's definition of a liability waiver.
Key Parts of a Liability Waiver
The most important part of a liability waiver is that you use obvious language. If your company is asking people to waive their rights, it doesn’t look favorable in court if the terms are buried inside of other provisions and hard to find or identify. The key to enforceability in a legal document is following local contract rules and using clear, concise language.
Key parts of a liability waiver include:
Part 1. Inherent Risks
Inherent risks are those that we take when engaging in specific activities. Bungee jumping or operating a motor vehicle are examples of such activities. Acts of gross negligence don’t preclude you from civil claims. Make sure the risk is clearly outlined in the waiver.
Part 2. Assumption of Risk
The assumption of risk clause indicates that the participating party understands the associated dangers of using your products or services. This section reduces the chance of a participant claiming that they weren’t aware of the risks.
Part 3. Release Clause
Release clauses state that your company doesn’t carry the liability burden arising from harmful events. You should concentrate on making this section as clear and straightforward as possible so that the other party understands what rights they are giving up explicitly.
Learn more about release clauses here.
Part 4. Indemnification
Indemnification clauses are acknowledgments made by participants. They agree to pay your legal costs and attorneys’ fees if their actions result in someone filing a lawsuit against you. This clause is an essential component to deterring lawsuits from third parties.
Learn more about indemnification clauses here.
Part 5. Insurance
The insurance clause of your liability waiver should clearly state that your liability insurance policy doesn’t cover participant damages. This statement reinforces the conspicuous language aspect of a liability waiver.
Learn more about insurance clauses here.
Part 6. Choice of Law
Choice-of-law clauses assign the venue and forum laws by which the legal liability waiver recognizes. Since parties may live in separate geographic areas, this section helps you clear up any confusion regarding applicable rules and regulations.
Learn more about the choice of law clause here.
Examples of When to Use a Liability Waiver
Are you still unsure of how liability waivers can help your company? Real-world examples can help you understand when to use a liability waiver.
Check out the five examples below:
Example 1. Ski Resorts
Skiing is an activity that carries a known risk of injury, which requires skiers to possess sound judgment, physical strength, and outdoor experience. Ski resorts can use liability waivers to prevent claims related to skier injuries. Some even print a disclaimer directly on the lift pass.
Example 2. Contractors
Contractor relationships are perfect for liability waivers. A waiver can preclude you from liability claims that occur at your facilities. The contractor or their employer is responsible for covering their claims unless you acted with negligence.
Example 3. Insurance Claims
Once customers accept an insurance settlement, insurance companies want reassurance that the claim is settled in full. Liability waivers in release forms help them achieve this objective.
Example 4. Amusement Parks
Amusement parks are inherently dangerous places. Operators are wise to incorporate a liability waiver into their ticket sales process. Doing so will protect you from unpreventable damages or harm.
Example 5. Massage Therapists
Massage therapy generally provides natural health benefits. However, an unknown condition or prior injury could result in new or worsening injuries. Massage therapists should protect themselves from claims by asking customers to sign liability waivers.
Example 6. Tourism Companies
The act of traveling by car, bus, train, or plane is dangerous in and of itself. Tourism companies not only utilize these modes of transportation, but they also offer extraneous activities that carry an inherent risk. Liability waivers ensure that you can keep the fun going as long as you are doing your part to keep everyone safe.
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Risks of Not Using a Liability Waiver
You risk subjecting your business or yourself to unwanted or unnecessary dispute processes when you do not use a liability waiver. While there may be some advance fees associated with developing, disseminating, and signing a liability waiver, you are protecting your business from legal disputes in the short and long term by doing so.
While a liability waiver provides some protection, it does not offer total protection, and it shifts the burden of proof to the client. Additionally, the liability waiver alerts the signee that they are about to embark on a potentially dangerous endeavor. This reason is why you should include language in your liability waiver that covers all possible types of legal harm.
Do Signed Liability Waivers Hold Up in Court?
Liability waivers hold up in court if they meet specific factors. For instance, California liability waivers must be unambiguous and are required in certain transactions. In contrast, Montana may not need them in some cases.
The best way to learn about the enforceability of your liability waivers is by speak with business lawyers directly.
Can Customers Sue You Even After Signing a Liability Waiver?
A liability waiver doesn’t preclude the operator or provider from claims arising out of negligence. If the participant can prove that you were negligent in some capacity, they can generally hold you accountable for their civil damages. As such, your organization must maintain the premises and equipment used by contract parties according to the law.
How to Write a Liability Waiver
Writing a liability waiver may seem like a straightforward task. However, the provisions contained within may be subject to other federal and state laws. By having a contract drafting process in place, you can effectively reduce the chance of making legal mistakes and contractual errors.
Follow the eleven steps below when writing a liability waiver for your organization:
- Step 1 . Identify all inherent risks associated with your products or services
- Step 2 . Make a list of all stakeholders affected by these inherent risks
- Step 3 . Consider associated future threats that may arise
- Step 4 . Compile your liability insurance policies in one place
- Step 5 . Determine which governing laws you want to apply to your waivers
- Step 6 . Schedule an initial consultation with contract lawyers
- Step 7 . Bring your findings and notes to your first meeting
- Step 8 . Receive the first draft of your liability waiver
- Step 9 . Approve the draft for finalization by your lawyer
- Step 10 . Ask stakeholders to sign a liability waiver as needed
- Step 11 . Retain copies of signed liability waivers and supporting evidence
In addition to writing a liability waiver with an attorney, you may also want to ask them about the contract signing procedure. Some companies ask employees to read the liability waiver out loud before permitting the customer to sign it. This practice, when performed uniformly, can strengthen their enforceability.
Here is an article on how to write a liability waiver .
Common Types of Liability Waivers
A general liability waiver will address your legal needs from an all-around standpoint. However, your business could benefit more by using a document that makes sense for your specific relationships with employees, vendors, and more. Consider the different options available to make the most informed decision possible.
There are seven types of liability waivers, including
- Type 1 . Accident liability waiver
- Type 2 . Activity participation waiver
- Type 3 . Contractor liability waiver
- Type 4 . General liability waiver
- Type 5 . Mutual liability waiver
- Type 6 . Personal injury waiver
- Type 7 . Property liability waiver
Regardless of what you call your documents, they essentially all perform the same function and need personalization for your business situation. While the language may differ slightly, these documents waive the right to legal claims to avoid a lawsuit.
Getting Help With Liability Waivers
Liability waivers are central to protecting your company from liability. Contracts are only as powerful as the words they contain. A well-crafted document will accomplish this goal while reducing your legal exposure
If you need help driving a liability waiver or other release of liability, contract lawyers can help. They can assist you from the initial intake all the way to the contract signing. Most contract lawyers offer counsel as business lawyers, which means they’re well-suited to help you navigate complicated matters.
Meet some of our Liability Waiver Lawyers
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