Retail Outlets
So Now You Want to Add a Guide Service?
by Charles C. Van Gorder

Once your outdoor recreation retail outlet is up and running, perhaps you will consider additional operations. Whether to attract additional revenue through the provision of new services or increased retail sales, or accommodate (and finance) your own sense of adventure, you may turn to opening a guiding services as an adjunct operation. Marketing and financing aside, there are many factors to consider before taking the jump into opening a guiding services. This article is intended to give the expanding retailer an insight into how a guiding service might best be melded into an on-going retail operation.

Business Entity
There is no question a guiding service entails a whole new area of potential liability. Injury is an integral part of outdoor recreational pursuits, and despite the best precautions, accidents will happen. It is important to protect your personal assets, and those of your retail operation, from exposure in the event of an accident. One way to do this is to establish your guiding service as a wholly separate business entity. Whether by forming a separate corporation, a limited liability company or another appropriate form of business entity, you may be able to limit the potential exposure to only the assets of the guiding service. By identifying and segregating the assets of your guiding service, your personal assets (and those of your retail operation) may be protected if the guiding service is found liable for damages. By limiting the potential assets that could be reached by an injured client, the guide service becomes a less appealing target for a lawsuit.

Identification of Guiding Service
Once a separate business entity is created for the guiding service, it is critical to establish that entity as a legitimate separate business. Utilize brochures and signs to distinguish your guide service from your retail operation. Make the guiding service open to all comers, not just clients of your retail operation. Ensure all licenses and permits are held in the name of the guiding service.

Employees or Independent Contractors?
If you utilize hired personnel for your guided trips, properly identify them as employees or independent contractors. Do not assume hiring guides as "independent contractors" is cheaper! Even though employees entail added costs such as payroll taxes and worker's compensation insurance, employees are limited in their potential claims if injured while on the job. Also, state and federal authorities may impose healthy penalties if they determine your "independent contractors" are actually employees according to their rules. 

Potential Liability
There are many sources of potential liability facing the guiding service. The most obvious is a claim of negligence resulting from an injury to a client and/or loss of property. Liability also may be based in a claim for breach of contract, where the client contends the outfitter did not fulfill the terms of the contract between them - such as making a successful summit bid. Be very careful in representations made in your promotional materials or in sales pitches to potential clients. Employees are another source of potential liability. You must make sure they are properly trained, fully qualified and have all necessary licenses. Check their references as you may be liable if they act inappropriately toward your clients. Your equipment must be maintained according to manufacturer specifications, and should be up-graded as necessary when new technology renders your present equipment obsolete. Don't push equipment beyond its intended limits. If you modify equipment, be sure the manufacturer approves or they are made in accordance with manufacturer specifications. If you rent equipment to clients not utilizing your guiding service, have adequate procedures in effect to ensure rental equipment is properly maintained and the clients are competent to use it.    

Liability Release Forms
Contrary to popular opinion, written liability release forms often are a valid and effective defense against claims brought by injured clients. It is critical, however, that release forms be worded correctly and properly used. When preparing your release forms, consult a legal advisor licensed in your state who is experienced in this area of the law. Simply borrowing the wording from another company's release form is asking for trouble - but you won't know it until it is too late. The participation of minors is a particular problem which must be specifically addressed in your release forms and insurance policies. 

Insurance
Injured clients can quickly deplete the financial resources of any guiding service, either through a demand for the payment of legitimate claims or the cost of defending against spurious claims. A separate comprehensive general liability ("CGL") insurance policy can provide critical protection at reasonable rates. The guiding service rather than the retail operation should be the named insured. Recreational liability insurance is a specialized market, and you need to be sure that the entire scope of your guiding service's operations are clearly covered by a policy. You should consult a qualified insurance agent or broker for advice on the type of insurance that is available, as well as the limits of liability that you should purchase. Be sure that your insurance specifically covers all of your areas of operation, domestic and foreign. In addition to liability insurance, you may require additional insurance for operation of your own vehicles and to cover any loss or damage to your own facilities, equipment and inventory.

Conclusion
Adding a guide service to your retail operation can result in a financial boost to your profits and a source of added enjoyment for your own involvement. Starting a successful guiding operation, however, takes careful advance planning to avoid numerous financial and legal pitfalls. By addressing the considerations set forth in this article, you will enhance the prospects for a successful guiding service which will not endanger the financial stability of you existing retail operation.