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Understanding Waiver Legalese – A Guide to Liability Waiver Clauses

Woman reviewing digital waiver on her laptop

Do you ever wonder what all the legalese in a liability waiver means? These documents can be so dense that many people just sign without even reading. The fact is, though, that whether you’re a business owner or a customer, it’s essential to understand all the implications when a waiver is signed. 

We put together this guide to waiver clauses to write a waiver, sign a waiver, and understand the legal implications.

What is a Liability Waiver?

In basic terms, a liability waiver is a legal document between a business and customer that is often at the center of injury lawsuits against a company. The customer agrees to accept the risk of injury in a dangerous activity or procedure and agrees not to hold the business responsible should damage occur. 

However, a waiver is not a bulletproof defense for businesses as it can only protect against ordinary negligence – an injury that would be inherent to the activity. If someone is injured and they can prove that the business was reckless in some way that endangered them, known as gross negligence, their claim can be successful despite any waivers signed.

We would break up a waiver into several components known as clauses. We would then write these clauses using legal terminology, so they are defensible in court. A waiver must be straightforward enough that an average reader can understand what rights they are signing away.

An Exploration of Waiver Clauses

No two waivers are going to be the same. Different industries, activities, and laws in the location, the action performed all inform how a company might write a waiver. If you are creating a waiver for your business, we highly recommend engaging a local lawyer’s services.

Here are some of the standard clauses you might find in a liability waiver.

Hold Harmless Clause

Liability waivers are also known as hold harmless agreements for a reason.

A hold harmless clause, also known as an exculpatory clause or release of liability clause, is a standard waiver clause that states that one party won’t hold the other liable for damages, losses, or costs associated with incurred legal issues. These potential costs are typically the loss, damages, or additional legal fees that would arise from a lawsuit for liability waivers.

For example, a skydiving business waiver would have an exculpatory clause that protects the business from any responsibility or costs associated with the client becoming injured while taking part in the skydiving activity.

The exculpatory clause is an integral part of any liability waiver. For companies whose activities involve some level of danger or risk, it’s understandable why this clause is necessary.

However, these clauses are still crucial for companies that offer activities that aren’t visibly risky. 

Accidents happen all the time, and someone engaging in something as casual as a massage or participating in an escape room challenge can still be harmed. It’s always better to be protected instead of leaving your business vulnerable to lawsuits.

Here’s an example from Law Insider:

The undersigned hereby RELEASE, ACQUIT AND FOREVER DISCHARGE HLSR, its subsidiaries and affiliates and its and their present and former directors, officers, employees, agents, volunteers, and representatives and the respective heirs, administrators, executors, successors and assigns (collectively, the “HLSR Parties” or individually, an “HLSR Party”) from any and all claims, causes of action, suits, demands, settlements, judgments and/or expenses (including, but not limited to, reasonable attorneys’ fees) for personal injury, death and/or property damage, accrued or to accrue in the future, known or unknown, (collectively, “Claims”) relating to or arising out of any negligent acts in connection with his/her entry into and participation in the Activities, including but not limited to the NEGLIGENT ACTIONS OF THE HLSR PARTIES, REGARDLESS OF WHETHER SUCH NEGLIGENCE WAS THE SOLE, PROXIMATE OR PRODUCING CAUSE OF THE CLAIMS. Without limiting the foregoing, the undersigned agrees that the HLSR Parties shall not be liable to him/her, his/her family, heirs, administrators, executors, or assigns for Claims arising from or related to the undersigned’s entry into and participation in the Activities.

Voluntary Assumption of Risk Clause

This clause outlines all of the risks inherent in the activity or procedure the signer is about to undergo. The clause then states that on signing, the reader understands and accepts the risks you outlined, so they can not seek legal compensation should they become injured due to those inherent risks.

However, this only protects against those inherent risks, sometimes known as ordinary negligence. Should your business be successfully proven of engaging in gross negligence, or a willful lack of duty of care, this defense can not protect your business against that lawsuit.

Here’s an example from Rancho Santiago Community College District

I am voluntarily participating in this Activity. I understand that there are risks associated with my participation in this activity, such as physical and/or psychological injury, pain, suffering, illness, disfigurement, temporary or permanent disability, death or economic loss. These injuries or outcomes may arise from my own or others’ actions, inactions, negligence, or the condition of the Activity location (s) or facility (ies). Nonetheless, I assume all risks of my participation in this Activity, whether known or unknown to me, including travel to and from the Activity (including air travel) or any events incidental to this Activity.

Indemnity Clause

Have you ever wondered who will have to pay the bill if one of your customers willfully or negligently damages your expensive go-karts or other similarly pricey equipment?

An indemnification clause is similar to an exculpatory clause. However, you also stipulate that the signer agrees to indemnify (material cover losses) suffered by you if they acted outside of your safety guidelines. For example, in the instance of go-karts, you would have to stipulate that they would be responsible for damages to your property or equipment if there were an accident due to reckless driving instead of mechanical failure. 

Here’s an example from the Healthcare Insurance Reciprocal of Canada:

The (name of the healthcare organization) agrees to defend, indemnify and save (the other party) harmless from all loss, cost, expense, judgment or damage on account of injury to persons, including death or damage to property, in any way caused by the negligence of the healthcare organization, its servants, agents or employees related to or arising out of programs or other matters to which this agreement pertains, together with all legal expenses and costs incurred by the (the other party) in defending any legal action pertaining to the above.

The (name of the other party) agrees to defend, indemnify and save the (name of the healthcare organization) harmless from all loss, cost, expense, judgment or damage on account of injury to persons including death or damage to property, in any way caused by the negligence of the (other party), its servants, agents, or employees related to or arising out of programs or other matters to which this agreement pertains, together with all legal expenses and costs incurred by the hospital in defending any legal action pertaining to the above.

Looking For Waiver Templates as a Basis to Get Started Writing a Waiver?

Download Waiver and Assumption of Risk Templates Here

Make Sure Your Liability Waiver Works For Your Business 

Waiver clauses can be confusing, but they’re essential to any effective liability waiver. Now that you understand the basic needs, you’ll be ready to work with a lawyer to craft an indemnity clause that protects your business from liability and lawsuits.

Once you have a clearly-written liability waiver that works for your business’s needs, make signing liability waivers a breeze with WaiverForever! Our easy-to-use service quickly saves signed waivers to your secure account. Then you can access them at any time. This convenient service makes protecting your business easy.

To learn more about our features, and read through resources that cover all of your waiver needs, click here