Best Practices for Transferring Third Party Risk

Business/Retail Liability Waivers in the Age of COVID

As businesses reopen, the practice of asking customers to sign COVID-19 liability waivers is increasing throughout the United States.  Dentist and doctor’s offices, salons, restaurants, gyms, day care centers, movie theaters and bowling alleys are just some of the businesses now asking people to sign COVID-19 waivers.  However, it is uncertain how much weight those waivers will carry in court. And if the businesses are not complying with local, state and federal health and safety guidelines concerning COVID-19, they may still be found liable.   Whether courts will consider COVID-19 liability waivers to be enforceable will vary depending on state law, as well as the language of the releases. 

What is a waiver of Liability? A waiver of liability is a contract between your business and a customer or participant. It educates the customer about the risks he is undertaking when participating in the activity. When he signs the form, the customer acknowledges that he understands the risks and agrees to accept them. The customer also waives his right to sue your business for injuries he sustains from the activity.

Waiver of liability forms are intended to reduce the number of negligence suits filed against your business by injured patrons. They shift some of the responsibility for injuries from your business to the participant, and the participant assumes certain risks associated with their participation.  A waiver of liability is not a substitute for general liability insurance. Some customers who have signed a waiver may still file a claim or lawsuit.

Waivers can be enforceable and a useful protection to your business.  To be most effective, you should consult with an attorney to draft the waiver.  Here are some items to discuss with your attorney:

  1. Are waivers valid in the State I conduct business? Some states for instance do not allow a parent/guardian to waive a minor’s rights. 
  2. The waiver should be narrowly tailored to your business, in other words, informing the customer of potential risks associated with their participation.
  3. The location of the language that absolves the party of responsibility must be prominently seen. If it is tucked away within a lengthy document or difficult to find (small print), the court can determine you did not give away your right to sue. On the other hand, if the important language is found early in the document and in bold lettering, the document will be more easily enforced.
  4. The language of the waiver must be clear, the individual must have understood and consented to the waiver, and the waiver cannot waive liability for willful misconduct or gross negligence. A waiver can release your business from liability for ordinary negligence only. 
  5. What are my options if a customer refuses to sign a waiver?

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Christine Trimarco

With her extensive legal and insurance industry experience, Christine serves as Complex Claims Counsel at Assurance. She’s well-versed in areas like construction law, product liability, medical malpractice and errors & omissions. Prior to joining Assurance, Christine was an attorney for Cassiday Schade LLP, where she was a partner and chair of the hiring committee. She earned her Juris Doctor from The John Marshall Law School, as well as a Bachelor of Arts degree in Psychology from DePaul University.