ASSUMPTION OF RISK

Assumption of Risk – Legal Defense in Liability Claims

In plain language: The assumption of risk is a concept in insurance that states if someone willingly takes part in an activity that has obvious risks, they cannot sue if they get hurt. 

Technical definition: Assumption of risk is a legal defense in liability claims where the defendant argues that the plaintiff knowingly undertook an activity which they understood posed inherent risks. This defense often arises in the context of personal injury and premises liability cases and can sometimes be a complete bar to recovery. 

Picture this: you're at a baseball game, and you're struck by a foul ball. While painful and unfortunate, can you sue the team or stadium if you understood that foul balls are a known risk of attending a baseball game? This is where the legal doctrine of assumption of risk comes into play. 

TL;DR

Assumption of risk is a concept where a person knowingly takes on a risk and therefore cannot sue if a predictable incident happens. 

This doctrine affects day-to-day agency work by guiding decisions on liability claims and loss evaluations. 

A common pitfall is misunderstanding the different types of assumption of risk - primary, secondary, express, and implied. 

Agencies can win by educating clients on this concept to prevent potential legal issues. 

What Is Assumption of Risk in Insurance?

Assumption of risk—sometimes referred to as the assumption of risk doctrine in its wider context—functions as a primary assumption of risk in certain scenarios, like when attending sporting events or participating in extreme recreational activities like scuba diving. It implies that the person has knowledge and appreciation of the risk involved and still chooses to partake in that activity, often signified by a signed waiver or verbally acknowledged. In some cases, particularly where the danger is obvious, implied assumption can be considered even without a direct agreement. 

There is also secondary assumption of risk, which is not a complete defense but instead falls under comparative fault rules. This means that the plaintiff's recovery may be reduced by their percentage of fault, rather than completely denied. 

Assumption of risk typically appears in exclusions or affirmatively in liability waiver clauses common in personal injury and premises liability policies. It's a fundamental concept that also touches on public policy considerations, safe behaviors, and liability assignments. 

Key Related Terms to Know

Express Assumption of Risk – When a person specifically agrees, usually in writing, to accept a risk associated with a particular activity (e.g., signing a liability waiver before going scuba diving). 

Implied Assumption of Risk – Arises when a person inherently understands and accepts the risks of a dangerous activity without expressly stating so (e.g., attending a baseball game and understanding the risk of being hit by a foul ball). 

Primary Assumption of Risk – Applies when the defendant owes no duty to protect the plaintiff from a particular risk (common in contact sports). 

Secondary Assumption of Risk – When the defendant does owe a duty of care, but the plaintiff knowingly encounters the risk posed by the defendant's breach of duty. 

Contributory Negligence – A principle of tort law that can reduce the amount of damages a plaintiff can recover if they're found to have contributed to their own injury. 

Comparative Negligence – A rule used to compare the negligence of the plaintiff with the negligence of the defendant and adjust the damages accordingly. 

Affirmative Defense – A defense that raises new facts or developments that could defeat a plaintiff's claim even if all allegations are true. 

Common Questions About Assumption of Risk

Can "Assumption of Risk" apply without a signed waiver? 

Yes, this is referred to as an "implied assumption of risk". It can be invoked when someone willingly takes part in an activity with apparent and known risks. For example, someone voluntarily participating in a Burning Man Festival, and suffering physical injury as a result of excessive heat, could be considered to have impliedly assumed this known risk. 

What is the difference between express and implied assumption of risk? 

Express assumption of risk is when a party knowingly and without force agrees to the risks of an activity—often explicitly through a liability waiver. Implied assumption, however, is less direct and is determined from a person's actions or behavior. Deciding to participate in an obviously dangerous activity like skydiving would demonstrate an implied assumption of risk. 

Does assumption of risk apply to all potential injuries? 

Assumption of risk applies to foreseeable risks inherent to the activity. However, it may not apply if the defendant engages in reckless conduct or intentional misconduct beyond what the plaintiff could reasonably have anticipated. For example, if safety equipment is faulty and fails, resulting in a scuba diving accident, the injury is not considered an inherent risk of the activity. 

How does "assumption of risk" affect claims handling? 

This doctrine plays a significant role in evaluating liability claims. If one can provide evidence that the injured party knowingly assumed the inherent risks involved in an activity, it may substantially impact claim settlements. This is why it's important for insurers to consider and identify potential scenarios of assumption of risk in their claims handling procedures. 

Assumption of Risk vs. Contributory Negligence

While both terms fall under the umbrella of defense in the event of an accident, they are fundamentally different legal concepts.  

Real Claim Examples Involving Assumption of Risk

Scenario 1: At a Ski Resort, a guest ignored posted warning signs about clear warnings of potential avalanches and ventured off the demarcated trail. An avalanche occurred, causing the skier significant injury. When the skier turned to the resort for compensation, the resort invoked the assumption of risk doctrine, maintaining that the skier understood and accepted the inherent risks associated with skiing, particularly when ignoring safety directions. 

Scenario 2: A spectator at a baseball game got struck with a foul ball, resulting in a severe eye injury. Despite the severity of the injury, their legal claim was thwarted by the assumption of risk doctrine. It was held that being struck by a foul ball is within the assumptions of risk inherent to watching a baseball game. 

Scenario 3: A concertgoer at a grand music festival suffered from heatstroke due to the lack of proper shade provisions at the venue. Although outdoor concerts usually involve assumed risks like inclement weather, the organizers overlooked the importance of providing adequate shade for attendees. While the concertgoer might have assumed risks related to weather, the lack of provisions to guard against heat was deemed reckless conduct on the part of the organizers and therefore the assumption of risk defense was unsuccessful. 

Limitations and Common Mistakes

Assumption of risk does not universally apply. It primarily applies to clearly hazardous contexts or activities. 

It is a common mistake to think that implied assumption of risk would automatically stand up in court. Proving that the injured party had a full understanding of the risk may be challenging. 

Mistakes in drafting liability waivers may render them unenforceable. 

Misunderstanding the roles of express assumption, implied assumption, primary and secondary in different contexts can lead to incorrect claims handling and increased E&O exposure. 

Assumption of risk defenses may fail in situations where the negligent party has created additional or unnaturally heightened risks apart from those inherent in the activity. 

How to Explain Assumption of Risk to Clients

Personal Lines client "Let's think about it like going to a baseball game. When you choose to attend, there's a small chance you might get hit by a foul ball. It's one of the known risks of the activity, and by choosing to go, it's generally accepted that you're assuming that risk." 

Small Business owner "Imagine you own a skating rink. When people come to skate, they understand there's a risk they might fall and get hurt. If they skate anyway, they're assuming that risk. This is important because it can help protect your business from certain liability claims." 

CFO or Risk Manager "In your role, understanding assumption of risk is essential. It's the principle that if someone willingly takes on a risk, they can't hold another party responsible for harm that arises from that risk. This can be a key factor when assessing possible liabilities and planning risk management strategies for our organization."