This is Part I of a 2 part series about liability waivers. An authority in the field of sport insurance, John shares some things he has learned about waivers while in the insurance business. Note: Some of the state laws have changed since this was originally published on John’s website. Change in state waiver law is a constant.) Part II will appear next week.
As a sports insurance specialist and risk manager, I often wondered the answer to this question myself because of all the contradictory information on this topic. To satisfy my curiosity, I interviewed the real authorities, the claims managers from the two leading sports insurance providers in the US. After all, they actually settle and litigate hundreds of these cases every year. In addition, I also interviewed one of the most widely published and respected attorneys in the US on this topic.
A waiver/release agreement has two primary protective purposes: 1) “Contractual Exculpation” which uses contract law principles (waiver/release is a contract) to excuse a sports organization for its simple negligence and 2) provides “real evidence” of the sports organization’s warning of inherent and other risks thereby triggering the common law Assumption Of Risk (AOR) defense under tort law.
A waiver/release is an exculpatory contract that attempts to excuse or relieve a party, (I.E. – the sports organization) for injuries to a participant that arise out of the known and unknown risks in an activity including the inherent risks or which arise from the sports organization’s ordinary negligence. Waiver/release documents are interpreted by the courts using contract law principles; this is why it is so important to have a well drafted waiver/release prepared for your sports organization.
A waiver/release will only by upheld if all of the following conditions are satisfied: 1) the injury arises from risks stated in the waiver/release contract (here we will often see language of “known and unknown risks” and discussions of the inherent risks of an activity) or from the sports organization’s simple negligence; 2) the waiver/release is properly drafted or worded according to the law in the state of the sports organization; and 3) it does not violate any state laws or public policy. If all of these conditions are met, the use of a waiver/release may result in the lawsuit being dismissed on Summary Judgment. Summary Judgment is important because it concludes litigation early in the process which can drastically reduce legal defense costs.
It is important to note that even if Summary Judgment dismissal is achieved, the legal defense costs will still be too expensive for most sports organizations and related directors, officers, employees, or staff to pay out of pocket. For this reason, a waiver/release is never a substitute for purchasing General Liability insurance.
Contractual Exculpation– Adult Is Injured Party
The law of adult waiver/releases varies from state to state. As far as adult injuries are concerned, waiver/releases can be very effective and result in lawsuit dismissal in most states as long at the three conditions listed above are satisfied.
States where recreational waivers will not be enforced by the courts: Louisiana, Montana, and Virginia. States with strict interpretations of contract language (they will be examined carefully and are circumstances where they won’t be upheld): Alaska, Arkansas, Arizona, California, Connecticut, Delaware, Hawaii, Indiana, Kentucky, Maine, Mississippi, Missouri, Nevada, New Hampshire, New Jersey, New York, Pennsylvania, Utah, Vermont, and Wisconsin.
States with more moderate interpretations of contract language (the decisions have been generally less strident than the strict interpretations in other states): Colorado, D.C., Florida, Idaho, Illinois, Iowa, Minnesota, New Mexico, North Carolina, Oklahoma, Oregon, South Carolina, South Dakota, Texas, Washington, West Virginia, and Wyoming.
States with fairly lenient interpretations (the decisions show good acceptance of waiver/releases and apply fewer standards to the language used): Alabama, Georgia, Kansas, Maryland, Massachusetts, Michigan, Nebraska, North Dakota, Ohio, and Tennessee. States where the outcome is not predictable because no case law or statutory authority: Puerto Rico and Rhode Island.
Contractual Exculpation– Minor Is Injured Party
The law of minor waiver/releases also varies from state to state. However, unlike adults, minors are not legally “competent” (in other words aren’t seen under the law as capable) to enter into a binding contract such as a waiver/release. Therefore, the only way for a minor to be bound for purposes of contractual exculpation would be through a parent’s signature on the waiver/release. Even then, most states will not allow a parent to contractually waive their minor children’s right to sue for a sports related injury. This is very much a developing area of the law that is undergoing constant change. What can be said is as follows:
The same three conditions that apply for upholding adult waiver/releases also apply to parental waiver/releases : 1) the injury arises from stated risks including inherent risks or from the sports organization’s ordinary negligence; 2) the waiver/release is properly drafted; and 3) it does not violate any state laws or public policy. In addition, the language in the wavier/release will be scrutinized under the same degree of strictness as indicated under adult waiver/releases above on a state by state basis.
At the current time, only the following ten states may uphold parental waiver/releases if all of the three conditions listed above are satisfied and subject to the same degree of state contractual scrutiny as listed above : California, Connecticut, Georgia, North Dakota, Wisconsin, Florida, Massachusetts, and Ohio. However, it is believed that the trend for the acceptance of parental signed waiver/releases is gaining ground in other states.
John Sadler is president of Sadler & Company, Inc., an insurance agency that specializes in sports and recreation insurance in all 50 states. Sadler has over 25 years of experience and is a licensed attorney, sports insurance expert, and sports risk manager. For more information on sports insurance and sports risk management, visit www.sadlersports.com and click on the links to the blog and risk management reports/forms/videos.
Photo Credit: ceonyc