As our nation’s reopening continues to move forward, businesses are facing the repercussions of the novel Coronavirus at what seems like every turn. As businesses attempt to navigate the “new normal,” a main concern being voiced by employees and consumers alike is what safety plan, if any, a business has proposed and is planning to implement. By now, a majority of companies are aware of recommended health and safety precautions for their industry; however, the liability exposure of businesses that reopen can be complex. This means that a business could potentially get itself into serious trouble if its reopening is not handled correctly. As of the end of June 2020, over 3,000 COVID-19 complaints have been filed already, with the majority concerning prisons and insurance disputes. Approximately 60 of the cases are business related.
Given that many Texas businesses and business owners have no choice but to reopen for financial reasons – even if they may feel reluctant – it’s important that business owners understand the necessity of drafting a comprehensive COVID-19 liability waiver and the best practices for drafting such a document.
Protecting Businesses with Liability Waivers
While some states are contemplating legislation to limit business liability for COVID-19 claims, other states have not even discussed the issue. Additionally, at the federal level, legislators have discussed a safe harbor for some businesses and nonprofit organizations. The National Chamber of Commerce is pushing for some kind of broad, nationwide liability protection for businesses that follow specific safety standards. Until such measures are enacted, however, liability waivers are the best option for businesses reopening or considering reopening.
Liability waivers are important legal documents signed by customers which state that those engaging in an activity are knowingly participating and are acknowledging the potential risks associated with said activity. For example, a person who participates in skydiving will sign a liability waiver for the skydiving company to document their awareness of and consent to known risks. While this example may seem extreme, the current state of the country – and in particular in hot spots like Texas – mandates businesses draft a COVID-19 liability waiver due to the many unknowns surrounding coronavirus. Each state has its own caselaw determining the validity of waivers. Three states – Louisiana, Montana, and Virginia – do not allow them at all, while other states like New York only enforce liability waivers when the provisions are clear; California rarely enforces the waivers.
As businesses reopen, liability waivers are being used more often in states that allow them, but there is still uncertainty on how much weight the waivers will be given by a judge or a court. In order to increase the chances of the court giving the waiver weight, the business should comply with any local, state, or federal health and safety regulations, proclamations, or guidelines concerning COVID-19.
Traditionally, patrons signed liability waivers for high-risk activities; however, this prior norm has completely changed due to the ongoing pandemic. Patrons, who are already hesitant to venture outside of their homes, may be concerned with signing a waiver; nonetheless, businesses have to protect themselves. The waivers typically will provide immunity for certain liabilities such as negligence lawsuits, but do not protect against all risk. For instance, if an employee intentionally coughs on a customer, a waiver likely would not help. Likewise, if the business ignored all health and safety regulations, the court would likely permit the lawsuit to move forward on gross negligence.
Generally liability waivers are disfavored and are construed against the business drafting the waiver; therefore it’s crucial that a liability waiver clearly and concisely states the purpose of the waiver and spells out the terms. The language used can mean the difference between a business being held liable or not. It’s strongly recommended businesses consult with and hire an experienced Texas business lawyer to thoroughly draft a comprehensive liability waiver that addresses a business’ concerns in a legally sound manner. The waiver cannot be a sign on the door; rather, it is a contract between the business itself and the customer or the employee.
Terms and Conditions
The guidance of a Texas business attorney is vital in drafting a quality liability waiver that businesses will feel confident asking patrons to sign. If a liability waiver is not drafted correctly, a business could face severe consumer backlash that – in an already sensitive economy – could cause further financial burdens. For businesses dependent upon the success of reopening, this means there is little to no room for error when welcoming patrons back. No one-size-fits-all form exists that all businesses can use across all jurisdictions and industries. While the actual language of a liability waiver will be unique for every business, it is recommended to include certain items; however, businesses should seek the assistance of qualified counsel before finalizing and implementing any such documents.
When a business requires its patrons (and employees) to sign a liability waiver, it should provide the waiver in language everyone can understand. It is crucial that patrons are able to read and properly acknowledge with their signature that they have read and understand the terms of the document. In a liability waiver, a business can also delineate what it is asking of all who enter the premises, including whether masks are mandatory and other personal hygiene requirements. Remember, no terms should be thought of as implied or understood in a liability waiver. All terms need to be clearly stated so everyone is aware of what they are agreeing to.
The reason for the liability waiver, (COVID-19), should be clearly stated throughout the waiver. A business that has not previously required patrons to sign a liability waiver in order to be on the premises (e.g., restaurant, hair salon, etc.) must name COVID-19 as the reason for the liability waiver. Because a business cannot guarantee that a patron will not contract Coronavirus, the liability waiver should include the health and safety risks associated with COVID-19, as well as the fact that the business is unable to control it. The health and safety risks should be clearly delineated. Also, don’t forget that in most states, contracts aren’t enforceable against a minor; therefore, a legal guardian or parent should sign the waiver if a minor is receiving the services.
Unfortunately, a business could spend valuable time and resources drafting a liability waiver only for it to be inadequate and unable to provide liability protection. A liability waiver should neither include promises to the signee, nor should it contain complex legal language the average patron is unable to understand. The success of a liability waiver depends on its ability to demonstrate the signee was aware of all known risks associated with entering the premises and the business gave proper warning of said risks.
Exculpatory clauses (also known as waivers, disclaimers, releases, and/or acknowledgements) are complex and controversial legal constructs. When enforced by the courts, they will stop a negligence lawsuit. When they are disregarded or stricken, though, they allow risk to be passed to the business. COVID-19 will strain the viability of liability waivers due to its novelty, including its unclear means of transmission.
Texas Business Attorneys
Liability waivers can provide some peace of mind to business owners as our country reopens, however, this is dependent upon quality legal drafting. Without proper legal oversight, a business can actually harm on itself by using an ineffective document. The business lawyers at MehaffyWeber work closely with companies to address all concerns in drafting successful legal documents. If your business needs a liability waiver for COVID-19 caution, contact our team today to learn more.