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10 Things Every Business Needs to Know About Liability Waivers - the Most Thorough Free Guide to Lia

1. Does my business need a waiver of liability?

A liability waiver is an important document for any business providing recreational services to consumers.

This is especially the case for businesses providing activities with an obvious risk of injury – think surf schools, sky-diving operators, personal trainers, gyms and rock-climbing centres.

Even when the risk of injury is not so obvious, most recreational activities do come with some risk of injury, even if the activity is something you would ordinarily think of as ‘safe’.

A participant in a cooking class might accidentally cut their finger with a knife, for example. Nobody would call cooking a dangerous recreational activity, but injury is still possible.

If you can think of some way a customer might possibly be injured through participating in an activity your business hosts or conducts, you should think about putting in place a liability waiver.

Occupiers of premises should also consider a liability waiver form if they are permitting people to use their premises for recreational activities.

2. What exactly is a liability waiver?

A liability waiver is a contract between your business and a customer.

The contract includes a disclaimer from your business and an agreement by the customer to limit or waive his or her right to claim damages from your business should they suffer injury or death in participating in an activity provided by your business.

If an injury does occur, you may be able to rely on the waiver to prevent the customer from recovering compensation from your business.

3. What are the benefits of having a waiver?

Limiting liability

The obvious benefit of a liability waiver is limiting your business’ liability exposure.

For many recreational activities there is an inherent danger of accidental injury. Participants know they are engaging in a dangerous activity with a risk of accidental injury.

If you have ever been skiing, you will know how easy it is to fall. Skiing injuries such as broken bones, sprains and dislocations are inherent dangers of the activity.

If ski fields or ski schools could not rely on liability waivers and had to pay compensation for every injury sustained, they’d soon be out of business.

A waiver attempts to apportion the risk of someone suffering loss through injury between a business and a consumer.

A balance is struck between the expectations that:

(1) consumers should take some personal responsibility for their choice to participate in an activity with inherent dangers; and

(2) businesses should provide recreational services safely.

The extent to which liability can be limited depends on a number of factors which we will look at further below.

Deterring Claims

A waiver may serve to deter a customer from taking legal action against your business.

It is much better for a business to avoid claims altogether than it is to have a claim end up in court.

Once you are in court you may win the case due to your waiver or for some other reason, but not being in court in the first place is obviously the better place to be.

Notification of expectations

A liability waiver is also a good way to notify your clients what you expect from them as a condition of their participation in an activity.

For example, you might set out your expectations that the client will:

  • truthfully advise you of any medical reason why they should not participate in the activity;

  • follow your instructions;

  • wear the safety equipment you provide them;

  • ask for help if they need it; or

  • not engage in any risky behaviour.

If a client is injured due to their failure to follow your instructions or wear the safety equipment you provide, the fact you have included these requirements in your liability waiver will help when it comes to assessing whether your business is at fault for the injury.

4. Will a liability waiver completely cover my business from all liability?

If your liability waiver is correctly drafted it should, depending on the type of activity involved, protect your business from claims arising from injury or death caused by a failure by your business to exercise reasonable care and skill in providing the services.

Civil claims for personal injury are usually based in the tort of negligence or in breach of contract.

If someone is injured because of something your business has done or failed to do, you may be found to be negligent due to the failure to provide the services with due care and skill.

You may also be found to have breached the contract with your customer, due to contractual terms implied by Australian law.

Implied warranties

Despite what you may attempt to exclude in the terms and conditions of your customer contract or liability waiver, there are warranties implied by Australian statute law.

The provision of recreational services – experiences, instruction, guidance, event hosting – is usually considered to be the provision of a ‘service’ rather than the provision of ‘goods’.