Feature Article - August 2010
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Risky Business

The Ins and Outs of Risk Management

By Dawn Klingensmith

Self-Protection on Paper

Generally, an organization or a facility can be held liable for injuries resulting from its own negligence, but not for injuries resulting from the inherent risks of an activity. A waiver can offer some protection from liability for injuries caused by such negligence. Therefore, "It is worth the effort to develop a good waiver and use it for protection," Cotten said.

A waiver is a written contract between a service provider and the participant wherein the participant agrees to absolve the provider of any fault or liability for injuries resulting from the ordinary negligence of the provider, its employees or its agent, Cotten explains on his Web site, SportWaiver.com. Though there are minor differences, a waiver essentially is essentiallythe same as a release, or an exculpatory agreement.

An informed consent agreement, on the other hand, is a different type of document used to protect the provider from liability for risks associated with a treatment or program to which the individual agrees to be subjected. In general, "they are used when something is 'done to' the individual," such as medical treatment or research, Cotten said. Lately, though, personal trainers have begun making clients sign them before starting an exercise program.

The effectiveness of waivers differs by state, though Cotten emphasizes that a well-written waiver signed voluntarily by an adult is usually enforceable. But a number of factors can cause waivers to fail, including ambiguity. In fact, "The most common reason waivers fail is because they are poorly written," Cotten writes.

Fine Print = Flimsy Protection

Waiver language must be clear, unambiguous and specific as to the intent of the parties to release the provider from liability or negligence, Cotten added. Otherwise, the court likely will not enforce the waiver.

Waiver language should also be conspicuous to the signer. It is better for a waiver to be a stand-alone document than a paragraph or two included in a membership contract, although setting the waiver language apart with larger text or a box or subhead might protect against signers' claims that they failed to realize they had signed away legal rights.

Waivers should list the inherent risks of an activity; some state courts require this, and in any case without such a list a waiver may fail.

"This actually works to the advantage of the provider," Cotten said, "because including inherent risks in a waiver provides evidence that the signer was aware of the inherent risks of the activity and assumed those risks."

Keep all discussion relating to inherent risks separate so that the signer will not confuse inherent risk with the negligence risks, Cotten advised.