January 7, 2025 | 6

Is your liability waiver actually effective?

3 Myths and What to Do Instead

When I served as Executive Director of a nonprofit, I found a stack of signed liability waivers, dutifully kept on file to protect the organization. I read the waiver and realized that in the 5 years the organization had been using that waiver, no one had read it. How I knew? The waiver had a different organization's name all over it!

Liability waivers are not one-size-fits-all. There are many misconceptions about liability waivers and what they do and don't do.

Myth #1: A broad, general waiver will protect you

If a waiver is too general and doesn't actually put anyone on notice about the real, inherent dangers that exist in a given activity, then that waiver will not hold up in court.

The whole point of a liability waiver is for patrons to promise that they understand the specific risks involved, that they voluntarily assume those risks, and that they won't sue you if they get hurt because of those risks.

Myth #2: A waiver will prevent a lawsuit

This is not how liability waivers work. For better or worse, anyone can sue anyone at any time in the U.S. An effective liability waiver can stop the lawsuit in its tracks after it's filed, but it can't stop anyone from suing in the first place. Plus, whether the waiver applies in that case is a question of law that the court will decide as part of the lawsuit.

Myth #3: A waiver will shield bad behavior

Liability waivers generally do not cover gross negligence or intentional acts of harm. In some states, waivers don't even cover regular negligence (which means carelessness or an unreasonable mistake) but New Mexico does not have much case law on this. Most states agree, however, that gross negligence (a reckless disregard for the safety of others) isn't covered. It would be against public policy for a contract to give someone free license to recklessly or intentionally hurt others.

Best practices for a strong waiver:

• be specific about why the activity is inherently risky or dangerous and what harms might occur;
• be clear that the signer isn't obligated to participate;
• empower the signer to make an informed decision;
• be clear that the signer is giving up their right to sue if they choose to participate and are hurt by the known risks that have been disclosed to them;
• for an Honest Contract, don't put language in there that you know is not enforceable.

An effective waiver starts with you or your lawyer reading it.

Other things to note:

• liability waivers are not a substitute for insurance;
• they are not an all-encompassing shield;
• they are not a free pass to be careless;
• they cannot prevent a lawsuit from being filed;
• they are not a guarantee of protection (that's up to the court).