Protecting Your “Risky” Business
(or Limiting Your Liability)
Limiting liability is a key concern for any business owner or
operator; but for those operating adventure tourism activities – be
it land or sea – the issue becomes even more significant.
One key tool for tourism operators to limit their liability is
through the use of waivers. Considered the first line of defense
against operator liability, waivers ensure consumers have taken
the time to review, acknowledge and accept the responsibility for
participating in activities that assume a certain amount of “inherent” risk.
Waivers can also act as a key deterrent to “frivolous” claims.
But, as we all know, waivers are useless without best practices,
appropriate coverage and affordable insurance.
Indeed, the issue of industry insurance has been so prevalent
that the Council of Tourism Associations (COTA™) commissioned
a report three years ago on this topic. What did we learn? Mainly,
we realized the insurance industry had limited knowledge about
the adventure tourism activities offered by operators – as
well as the best practices that operators had in place to limit
their exposure to liability.
In many instances, insurers were gathering their information from
the operators’ consumer-oriented websites that referred to
the “thrills and chills” of the activities. With consumers
interested in thrills, and insurers being very risk averse – it
was clear that operators had to address two distinct audiences.
When this study was first conducted, we surveyed many operators
and learned some surprising things. For instance, a number of businesses
were operating without the appropriate amount of insurance because
they either couldn’t qualify or their premiums were too cost-prohibitive.
Through this report, COTA recognized the need to market how tourism
operators excel at safety and risk management to the insurance
industry. Along with promoting the industry’s best practices,
COTA teamed up with an insurance agent to create its Risk Management
and Insurance Program.
Essentially, the program is an effort to limit operators’ exposure
to liability through best practices, and to make this limited liability
status clear to the insurance industry.
Therefore, anyone going through the program receives an assessment
that is then passed on to the insurer, who then issues a quote.
As a result, COTA is able to offer operators lower insurance rates,
as well as provide liability insurance to operators for activities
that may not have been previously approved.
A key part of the COTA program is the Insurance and Risk Management
Handbook, which moves operators through effective best practices
and helps them apply for lower insurance rates. Along with a checklist,
the Handbook includes important information such as first-aid requirements,
operating guidelines and various communication protocols.
Within the Handbook, operators will also find the components of
a well-crafted and comprehensive waiver written by Robert Kennedy,
who is considered one of the country’s pre-eminent adventure
tourism lawyers. To access the Handbook, visit www.adventureinsurance.ca
Covering everything from assumption of risks to misrepresentation
and legal formatting, the waiver is a key tool for protecting your
adventure tourism operation, whether it’s land- or marine-based – despite
the current Marine Liability Act (MLA).
Introduced on August 8, 2001, the MLA includes comprehensive liability
rules that apply to vessels of all sizes and purposes operating
within the territory of Canada and its inland waters. Unfortunately,
marine adventure tourism activities were inadvertently “caught
in the net” as the MLA eliminated the use of waivers for
any commercial marine activity.
For many marine-based tourism adventure operators, this had an
enormous impact. Without valid waivers – which limited their
liability – these operators could lose the ability to acquire
insurance or to remain covered.
However, due to intense lobbying by the industry, Transport Canada
has agreed to amend this decision and will allow marine tourism
operators to use waivers (the amendment will likely become formalized
in summer 2007).
Regardless of the current MLA, all adventure tourism operators – be
it land or sea – are advised to continue using waivers; studies
indicate that people who sign waivers are considerably less likely
to sue.
Along with effective risk management and best practices, waivers
will serve as an important tool (now and in the future) in acquiring
coverage, protecting your business and – most importantly – limiting
your liability.
Source: Council of Tourism Associations: January 2007
Rebecca has been with Vancouver, Coast & Mountains for over
a year. She came to us from Ontario after having completed a Bachelor
of Commerce degree with a major in Tourism Management from the
University of Guelph. During her time in Ontario she helped manage
a small country inn and worked at a local tourism office and Chamber
of Commerce.