Every business owner assumes certain risks when launching their company, such as financial and reputation risks. Failing to develop a cohesive business plan and determine how to succeed in the marketplace could undermine your ability to generate revenue, resulting in financial losses. Ineffective business practices could undermine your reputation in the business community, making it challenging to secure future business opportunities.
Business owners also face legal risks. Patrons and employees may file lawsuits against businesses for various issues, such as accidents causing injuries and failing to comply with labor laws. While you can acquire liability insurance to protect your company from the cost of a lawsuit, you can use waivers to prevent some lawsuits. Let’s look at what a liability waiver is, when to use a liability waiver, and how companies benefit from using waivers.
What is a liability waiver?
Liability waivers are legal documents that ensure patrons assume responsibility for reasonable risks. Companies present the liability waiver form to patrons before providing services, ensuring they understand the activity they’re signing up for and the nature of the risks involved. Patrons who sign a release of liability form cannot hold the company responsible for unfavorable outcomes. For example, if a person wants to hike up an active volcano, their tour guide may require them to acknowledge they’re aware of the risk of cuts from sharp rocks. Signing the waiver prevents the patron from suing the travel company if they cut themselves on a sharp rock during the hike.
When should you use a liability waiver?
Businesses offering opportunities to engage in risky activities should use liability waivers. Base jumping and helicopter skiing are two of the most dangerous sports. Thousands of people pay to engage in these activities each year despite the risks. Companies offering these activities limit their liability with waivers, protecting themselves from lawsuits if patrons are hurt or killed.
Refer to life insurance policies if you’re in doubt about whether to use a liability waiver for your services. Activities such as scuba diving, skydiving, bungee jumping, hang gliding, and driving a race car may nullify a life insurance policy. Any activity invalidating a life insurance policy is risky, and you should have a signed copy of a liability release before enabling anyone to engage in those activities through your services. For example, although horseback riding is common, it’s risky. Tens of millions of people ride horses each year, and they may suffer from sprains, concussions, spinal cord injuries, and traumatic brain injuries.
You can talk to an attorney to determine if you need to use a liability waiver. You can also review frequently asked questions on liability waiver sites and ask online waiver providers if you should use waivers to mitigate your legal liability.
How can you benefit from using waivers?
Drafting a liability waiver is an informative process because it will clarify the risks associated with the activities offered by your business. You can use that information to introduce safety protocols and prevent injuries. For example, providing riders with Safety Equipment Institute-certified helmets reduces the risks of a concussion or TBI after a fall. While clients may not have legal grounds to pursue a lawsuit if they’ve signed a waiver, preventing accidents protects your reputation.
Lawsuits can be costly and time-consuming. Although liability insurance covers the legal fees and settlement costs stemming from lawsuits, preventing legal action enables you to maintain low insurance premiums and avoid time in court.
Liability forms are effective tools for educating patrons. Some people may not understand the potential risks, and reviewing a waiver may prompt them to withdraw from the activity if they have a heart condition or other medical issues. Even if you’ve taken steps to reduce your legal liability, a medical emergency will disrupt services and negatively impact staff and other patrons.
A liability waiver reduces a business’s legal risks. Businesses offering risky activities can use these forms to prevent lawsuits.
