Understanding Waivers: Protecting Your Business with Clarity and Precision

When running a business, managing risk is critical. One tool many businesses rely on is a waiver—a document designed to protect against potential lawsuits. However, not all waivers are created equal. In fact, studies indicate that only 40% of waivers hold up in court. This highlights the importance of crafting waivers with care and precision.

During a Waiver Development Seminar hosted by Markel International, key insights were shared about creating waivers that are more likely to stand up in legal disputes. If you’re drafting or revising a waiver, here’s what you need to know:

1. Call It What It Is: A Waiver

Your document must be explicitly titled and identified as a waiver. Avoid ambiguous terms like "disclaimer" or "voluntary relinquishment." Clearly state that the signer agrees not to sue in case of specific incidents.

2. Identify the Protected Party

The waiver must explicitly name the party it seeks to protect. For instance, a waiver for Pacific North Plumbing & Heating Ltd should clearly state the company’s name as the entity being shielded from liability.

3. Detail the Scope of Operations

A vague description of activities won't suffice. Clearly outline all services or activities the waiver covers. For instance, if your company installs plumbing systems, performs maintenance, and addresses heating emergencies, each of these should be explicitly mentioned in the document.

4. Define and Explain Negligence

Including a definition of negligence—the failure to take proper care in doing something—is critical. Explain how negligence applies to your operations, listing specific scenarios where it might occur. For example, negligence could involve improper installation of a system, failure to secure equipment, or overlooking maintenance protocols.

5. Be Blunt and Transparent

Ensure that signers understand the gravity of what they’re signing. Inform them directly that they are waiving their right to sue, and clarify how this protects your business. A suggested approach could be:
"By signing this waiver, you are waiving your right to sue Pacific North Plumbing & Heating Ltd for any incidents related to the specified activities. Please take all the time you need to read the document and let us know if you have questions."

6. Allow Ample Time for Review

Participants must be given sufficient time to read and consider the waiver before signing. A rushed signature could render the document invalid in court. Additionally, confirm that the individual had enough time to review and address any questions they may have.

7. Seek Professional Legal Advice

While waivers are an essential risk management tool, they are not foolproof. A well-crafted waiver should always be reviewed or drafted by a lawyer specializing in liability and waivers. This ensures it complies with applicable laws and increases its enforceability in court.

Supporting Your Waiver Strategy

Along with these tips, it’s helpful to review examples of effective waivers and adapt their structure to your needs. Remember, as this seminar emphasized, a waiver is not a one-size-fits-all document. Tailoring it to your business activities and risks is paramount.

The Insurance Perspective

At the end of the day, waivers are only one piece of your risk management strategy. While they can provide legal protection, insurance remains a cornerstone of safeguarding your business against unforeseen incidents. Pairing a well-drafted waiver with comprehensive insurance coverage ensures your business is as protected as possible.

If you need advice about risk management or insurance, feel free to reach out. And remember, for legal expertise, consult with a qualified lawyer who can guide you through the intricacies of creating enforceable waivers.

Jenny is a business insurance broker with Waypoint Insurance. She can be reached at 604-317-6755 or jhansen@waypoint.ca.  Please connect with me on LinkedIn at https://www.linkedin.com/in/jenny-holly-hansen-365b691b/

Jenny Holly Hansen is a cohost with Chris Sturges of the Langley Impact Networking Group. You are welcome to join us on Thursday’s from 4pm to 6pm at: Sidebar Bar and Grill: 100b - 20018 83A Avenue, Langley, BC V2Y 3R4

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