As a small-business owner, you assume a certain amount of legal liability each day your doors are open. This is especially true if you operate a business where participants engage in physical activity, coaching, financial activities, online communities or health-related activities. In theory, a good waiver form protects your business from unnecessary litigation in the unfortunate case that something goes wrong for a customer.
How Waiver Forms Work
Waiver forms protect business owners and organizers from liability should something go wrong for customers or participants in their programs. They are legal forms that can protect you from costly litigation, and they may also cause your customers or participants to think through the risks they assume through their participation.
As a small-business owner, you draft and print waiver forms for your customers or participants to read and sign. It is important to keep a dedicated file and digital copies of all legal waiver forms in case you ever need them in a legal case.
Limitations of a Signed Waiver Form
While signed waiver forms can sometimes protect your business from lawsuits, they have their limitations. Not all waiver forms are deemed enforceable in a court of law. You might still be sued for gross negligence or breach of duty.
A signed waiver form might also fail to stand up in court if the person who signed it was a minor or otherwise deemed to be incompetent to sign a contract. Before you accept a signed waiver form, it is wise to determine the customer is of age and is mentally sound to sign.
Waiver and Assumption of Risk Components
Having the proper waiver and assumption of risk components can protect you and make it more likely that your form can stand in court. Most waiver forms include the following components:
- Description of activities
- Business location and contact information
- Description of assumed risk
- Release from liability statements
- Agreement not to litigate
- Acknowledgment of reading and understanding
- Statement of state law
- Duration of validity
- Customer information area
- Area to sign and date the form
It is a good idea to specify that only contracts in their original worded format are accepted. You might have participants initial and date each page, in addition to signing at the end of the form.
Legal Counsel and Your Waiver Form
Many waiver agreement templates are floating around on the web, and many of them are free. For this reason, it can be tempting to create a legal waiver form on your own. Even if you attempt this, consult with a lawyer after you use a waiver template because every business and activity has unique liabilities. A lawyer can look over your waiver and assumption of risk form, make necessary edits, and look for blind spots and loopholes that might prevent your form from standing up in a court of law.
Liability Insurance and Your Business
Because your waiver form is not 100% effective in preventing legal liability, purchasing liability insurance to protect your small business further is a smart move. Liability insurance has several benefits, including:
- Protection from high litigation costs
- Peace of mind for your clients
- Peace of mind for you
- Increased financial security for your business
- Protection from employee errors
- Protection from data breaches
Some liability insurance providers supply their own templates for waiver forms to their small-business customers to customize. They might also offer services to look over and proof any waiver forms you are currently asking your customers to sign to take out the guesswork without costing you an arm and a leg.
Anne Kinsey is an entrepreneur and business pioneer, who has ranked in the top 1% of the direct sales industry, growing a large team and earning the title of Senior Team Manager during her time with Jamberry. She is the nonprofit founder and executive director of Love Powered Life, as well as a Certified Trauma Recovery Coach, certified HRV biofeedback practitioner and freelance writer who has written for publications like Working Mother, the San Francisco Chronicle, the Houston Chronicle and Our Everyday Life. Anne works from her home office in rural North Carolina, where she resides with her husband and three children.