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“Release of Liability” Agreement in the COVID-19 Era and Whether This Could Be a Proper Tool For Businesses

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What is a “Release of Liability” Agreement?

     A Release of Liability Agreement is essentially a legal document that allows a releasor (a person promising not to sue) to indicate that he or she acknowledges the risks and claims involved in a certain relationship and agrees not to sue the releasee for past or future injuries or damages.

     A simple form of the agreement identifies the parties (i.e. who the releasor and the releasee is); the effective date of the agreement; a description of the event, activity, or circumstances that underly the agreement; consideration (meaning the amount of money or something of legal value given to the releasor for signing the document);  the governing law (state) that will resolve any issues that might arise between the two parties.

How can businesses use a “Release of Liability” during the novel coronavirus pandemic?

     With uncertainty for the reopening of businesses, many businesses should be proactive in limiting the risks of operating their businesses once operations begin again. It is expected that many coronavirus-related lawsuits will be filed in the coming months and years. Therefore, in order to protect your business and any future liability for coronavirus exposure claims, it is important to look into liability waivers or Release of Liability Agreements.

     This can be a simple, cost-effective first step for all businesses, either including a release of liability provision within already existing templated contracts used or creating a separate waiver altogether. While no court has analyzed these types of waivers in the coronavirus context, it will surely arise in the coming months. In most jurisdictions, these agreements are enforceable, shielding the releasee from liability that might arise with respect to the virus so long as an injury does not arise from intentional or reckless behavior on the releasee’s part.

     Whether the Release of Liability agreement is intended for employees and workers returning to work, customers, visitors, or transacting partners, it is crucial that the Release of Liability agreement your business uses clearly lays out the risks associated with the coronavirus and your business, if any. In addition, the release should lay out any other rights you intend for the releasor to waive. The clarity of these agreements is essential to the validity of the agreement.

     Further, whether this type of agreement is appropriate for your business depends on various factors, including the nature of your business, the type of goods or services your business provides, and the industry that your business is in. The risks are potentially greater for businesses within hospitality, such as restaurants, hotels, or retailers, and other businesses that have direct interactions with customers and consumers. While some federal lawmakers are pushing for liability protections for businesses that reopen, no measures have been taken thus far. Therefore, it is essential that you protect your business from these liability concerns, eliminating the risk of potential liability issues when planning to reopen by following safety reopening procedures, and implementing Release of Liability agreements.

     Besides creating a Release of Liability Agreement and familiarizing yourself with the applicable guidelines from the various state, local, national, and global authorities, you should also put steps in place to ensure you are limiting the risk of exposure to the virus. These steps can include creating safety protocols, establishing social distancing procedures, evaluating operations and supply chain processes to limit the number of people a product might touch, rearranging physical office and store locations, closing break rooms and common areas, having shifting work schedules for employees, regularly cleaning work areas, and discussing the responsibilities of your workforce with employees.

     Call our offices if you have any questions.

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