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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 [1].

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 participating 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 [2]. In fact, in many jurisdictions, a waiver cannot protect a company from its own gross negligence. 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.

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.

Part 5. Insurance

The insurance clause of your liability waiver should clearly state what your insurance policy coverage terms are regarding participant damages. This statement reinforces the conspicuous language aspect of a liability waiver.

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.

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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. In general, different states may have different standards as it relates to the enforceability of liability waivers – especially concerning gross negligence, willful misconduct, and recklessness [3].

The best way to learn about the enforceability of your liability waivers is by speak with business lawyers directly.

See Liability Waiver Pricing by State

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.

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.

Sources

  1. ^ https://www.law.cornell.edu/wex/waive
  2. ^ https://www.law.cornell.edu/wex/tort
  3. ^ https://leg.mt.gov/bills/mca/title_0270/chapter_0010/part_0070/section_0530/0270-0010-0070-0530.html

ContractsCounsel is not a law firm, and this post should not be considered and does not contain legal advice. To ensure the information and advice in this post are correct, sufficient, and appropriate for your situation, please consult a licensed attorney. Also, using or accessing ContractsCounsel's site does not create an attorney-client relationship between you and ContractsCounsel.


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Risk Assessment

Liability Waiver

Texas

Asked on Nov 26, 2023

What if the liability waiver is unclear?

I recently signed a liability waiver for a recreational activity. However, the language of the waiver is vague and unclear in certain areas. I am concerned that I may be held liable for something that was not originally intended in the waiver. I am looking for advice on how to protect myself from potential liabilities that may arise if the waiver is not clear.

J.R. S.

Answered Jan 5, 2024

Generally speaking, the purpose of a waiver is to limit the liability of landowners in certain situations for recreational purposes and tends to be binding, whether the signor understands the language or not. I would need more specific information in order to assess if liability might be determined, even with a vague or ambiguous waiver, especially if you or others suffered from injuries incurred during recreational activities. Further research into case law and statutory provisions specifically dealing with the interpretation and enforcement of liability waivers would be necessary to fully answer your question.

Read 1 attorney answer>

Event Planning

Liability Waiver

California

Asked on Nov 25, 2023

Does every event need a liability waiver?

I am an event planner and I am in the process of planning an event. I am aware that liability waivers can be used to protect against legal action if an accident or injury occurs during the event. I am wondering if it is necessary to have a liability waiver for every event, regardless of the size or type of event. I am trying to determine the best way to ensure the safety of my guests and myself.

Luiza D.

Answered Dec 1, 2023

In California, using liability waivers for events is a common practice to help protect organizers from legal claims arising from injuries or damages that may occur during the event. However, whether an organizer needs a liability waiver, or not, for every event depends on various factors, including the type of event, the potential risks involved, and local regulations. Some events, especially those involving physical activities or potential hazards, may have a higher risk of injuries, making liability waivers more advisable. However, even for lower-risk events, organizers may choose to use liability waivers as an extra layer of protection. It's essential to consult with a California lawyer who is familiar with the local regulations of where the event will take place to determine whether a liability waiver is necessary for your specific event and what language to include in the waiver.

Read 1 attorney answer>

Business

Liability Waiver

Texas

Asked on Nov 27, 2023

Is a liability waiver binding on heirs?

I recently inherited a business from a family member and I am looking to create a liability waiver for the business. I want to make sure that the waiver is binding on the heirs of the business in the event that the business is passed down. I want to make sure that any potential liabilities are not passed on to future generations of the family.

J.R. S.

Answered Jan 5, 2024

A liability waiver can indeed be binding on heirs if the language of the waiver expressly includes heirs or assigns. However, the binding nature of a waiver on heirs could be affected by several factors. Administrative regulations such as 1 TAC § 373.209 and statutes like V.T.C.A., Civil Practice & Remedies Code § 71.021 and V.T.C.A., Special Districts Code § 8502.020 stipulate conditions under which heirs can assert claims, which could potentially affect the binding nature of a waiver on heirs. Finally, the enforceability of such waivers can be influenced by whether the instrument is recorded or not, as per V.T.C.A., Property Code § 13.001. In summary, while a liability waiver can be binding on heirs, the enforceability of such waivers can be influenced by various factors, including the specific language of the waiver, the termination of the contract, administrative regulations or statutes, and whether the instrument is recorded or not. I recommend having a discussion with an attorney and have them draft the language to achieve your goal.

Read 1 attorney answer>

Small Business

Liability Waiver

North Carolina

Asked on Nov 27, 2023

Does every participant need a liability waiver?

I am a small business owner who is planning to hold an event for a group of participants. I am looking to ensure that everyone involved is properly protected in the event of any accidents or injuries. In order to do this, I am considering having participants sign a liability waiver. I want to make sure that I have the right legal protection in place and would like to know if every participant needs to sign a liability waiver.

Shelia H.

Answered Dec 10, 2023

Yes. If you are having an event, every participant needs a liability waiver. This is especially important if the event includes activities that may result in someone getting hurt. Additionally, it provides you with an opportunity to disclose the possible hazards and an opportunity for the participant to make an informed decision regarding whether to attend and participate. Finally, even if you have a waiver, you will also want to supplement the waiver with insurance that will cover your event.

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Contracts

Liability Waiver

Connecticut

Asked on Nov 26, 2023

Can a liability waiver be too broad?

I am a business owner and I am looking to have a liability waiver created for my business. I am concerned that the waiver might be too broad and not effectively protect my business from potential liabilities. I am looking for advice on how to ensure that the waiver is comprehensive, yet not overly broad.

Donya G.

Answered Jan 2, 2024

Yes. If the state has laws that would limit liability or outline that certain conduct in that state would be the burden of the owner, that would be difficult and sometimes prohibited from being passed on to others

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