Am I signing my life away?
What it means to waive liability in Colorado
Now more than ever, businesses in Colorado need to protect themselves against various liabilities. Several different actions can help them reduce their exposure risks, including liability waivers.
In essence, liability waivers disclaim legal responsibility for the business by getting other parties to agree to take on the risk of doing something.
Historically, businesses that offer recreational activities have used these waivers. However, more and more companies are using them today to avoid the financial ramifications of an accident. Consumers or patrons may need to sign a waiver to exercise at the gym, use a rideshare service, or ski.
The Basic Elements of a Liability Waiver
A reliable liability waiver must include the following elements:
- Release of the right to sue if any loss occurs as a result of participation in the activity
- An express assumption of risk acknowledging understanding of the activity and its risks, and voluntary accepting those risks
- A hold harmless agreement in which the participant agrees not to hold the business responsible for any loss that could arise from participation in the activity
- An indemnification in which the participant agrees to pay the company for any losses resulting from the participant’s participation
- A medical consent in which the participant agrees to be responsible for any medical expenses they incur because of their participation
Stipulations of an Effective Colorado Liability Waiver
Liability waivers are legally binding contracts. As such, they must have specific stipulations to be enforceable under Colorado law. They prove that the signer was warned about the risks of participation in an activity and still agreed to participate. Typically, if someone refuses to sign a liability waiver, they are excluded from participating in the activity.
These liability disclaimers are critical, but their usefulness depends on other factors. To be effective and enforceable, liability waivers must:
- Not involve a public or essential service—if the service is suitable for government regulation or is a practical necessity for many people, it’s likely not eligible to be protected by a waiver.
- Not violate state laws.
- Allow parties to agree fairly.
- Clearly express the waiver of rights—avoid legal jargon, tiny print, and references to nonexistent laws.
- Be concise- they shouldn’t be too lengthy to read before the participant takes part in the activity they cover.
In addition, these waivers aren’t enforceable if willful or wanton negligence led to an injury. While generally frowned upon, disclaimers for ordinary negligence can be deemed valid by Colorado courts.
Suppose the court determines that a waiver is invalid and unenforceable. In that case, it won’t protect the business from someone who wants to file a lawsuit due to their injuries.
However, if a waiver is enforceable, an injured party who signed one likely won’t be able to pursue an injury claim against the company. These waivers protect businesses by placing the liability back on the participant or their parent or legal guardian.
Obtaining a Signed Liability Waiver
Once an airtight liability waiver has been drafted, the next step is getting patrons to sign it. While some Colorado businesses are sticking with traditional paper waivers, others are shifting to electronic waivers. Under 15 U.S.C. § 7001 (a) (1), (2) & (5), the electronic release of liability waivers is just as enforceable as those on paper. A waiver can’t be invalid simply because it is electronic instead of on paper. The same attributes that make a paper waiver invalid will also make an electronic release invalid.
Companies that decide to use an electronic waiver can use a system that allows participants to complete the release online at their convenience or enable them to complete the disclaimer at the business. Both are legally enforceable. Online waivers can also be included in the online terms of service or use.
Many businesses are turning more towards electronic waivers to help reduce the paperwork they must keep track of and benefit the environment.
Other Steps Business Owners Can Take to Minimize Their Risk
In addition to a liability waiver, there are other steps business owners can take to minimize risk. It should go without saying that businesses should carry insurance. Owners need to ensure that they hold the correct types of insurance in the appropriate amounts for their line and size of business. Not having insurance or having too little is a serious liability risk.
Companies that operate as a limited liability entity experience many benefits. One of the most crucial is that their owners aren’t personally responsible if the business is held legally liable for something. An injured party who wins a lawsuit can seek assets from the company but not from its owners.
Business owners shouldn’t assume certain things or rely on verbal agreements. Using written (or electronic) contracts for everything helps ensure that they will be legally enforceable. Each party will know exactly what is expected of them with a robust written agreement.
Businesses are also expected to exercise reasonable conduct, even with liability waivers in place. If a company is willfully or wantonly negligent, a liability waiver will not provide legal protection. You must be able to prove that you made a reasonable effort to provide a safe environment for the public.
Hire an Experienced Business Lawyer to Help Protect Your Company
Colorado courts interpret these documents according to contract law principles. The way they are drafted is crucial. One misplaced clause or comma can bring your liability waiver crashing down. In the end, it boils down to the language used in the contract, the prudence of the organization, and the nature of the accident as to whether a company can be held liable for participants’ injuries.
If you aren’t well-versed in drafting effective liability waivers or other steps used to protect Colorado companies, it’s time to reach out to an experienced Colorado business lawyer. The right business attorney can assess your company’s risks and liabilities and provide sound, reliable legal advice. Additionally, they can help you draft enforceable and valid liability waivers.