The Top Ten (±) Reasons Why Guides and Outfitters Can Loose Their Shirts!!!

by Charles H. van Gorder

Number 10:               
They ignore "River/Trail Karma."

Number 9:               
Promotional materials are unrealistic in their representations.

Number 8:               
Business checking accounts are used to pay for personal expenses.

Number 7a:             
They purchase the wrong type of, or inadequate, liability insurance.

Number 7b:               
They fail to read the insurance policy and to comply with the conditions of coverage.

Number 6a:               
Clients are told not to worry about the release form they are being asked to sign as it isn't worth the paper on which it is written.

Number 6b:               
Otherwise valid release forms are signed by minors, or by non-parental adults on behalf of minors.

Number 6c:               
Nobody can find the release forms after a claim has been made.

Number 6d:               
Safety talks are given by the most junior guide, or assigned as a penalty.

Number 5:               
Outfitters treat their guides as independent contractors when properly classified as employees.

Number 4:               
Guides are not properly screened, trained or supervised.

Number 3:               
There is no emergency response plan prepared in advance, or such a plan is not properly implemented.

Number 2:               
Common sense is ignored when on a trip with commercial clients.

Number 1:               
Outfitters and guides agree to take lawyers as clients.

Number 10:                They ignore "River/Trail Karma."

 It doesn't matter whether you are a whitewater rafting, sea kayaking or horse packing outfitter. While you may be competitors with each other, you are also members of the same industry - with more interests in common than not. If the industry suffers as a whole, you all will suffer individually. While there is nothing wrong with healthy competition, knives in each other's back will hurt the client respect and credibility of all. Inconsiderateness on the part of an outfitter or his or her clients could ruin the wilderness experience for the clients of all other outfitters. What goes around comes around - don't ignore good river or trail karma.

Number 9:                Promotional materials are unrealistic in their representations.

Promotional materials are intended to attract potential clients. Too often such materials make representations which are unrealistic and can set the stage for a subsequent lawsuit. Any brochure that says the particular activity is "safe" or suitable for anyone, regardless of physical fitness, skill or experience, is asking for trouble. Such materials paint an inaccurate picture of the risks involved in your particular activity, and may attract clients who should not participate. Clients need to be aware there are inherent risks in the particular activity they may pursue. Unrealistic promotional materials undercut the defense that a client assumed the risks inherent in the activity because such risks are minimized rather than acknowledged. Furthermore, the more promises you make, the more likely you are to be sued for misrepresentation even if no one is physically injured. Also, let people know in your brochures or on your web page that they will have to sign release forms!!

Number  8:                Business checking accounts are used to pay for personal expenses.

Often outfitters simply assume that if they have incorporated their business, their personal assets will be safe in the event of a successful lawsuit. This is simply not true. Outfitters must be sure their choice of business entity has been properly established, and once established, properly maintained. Estimates are that in 80%+ of the cases where the protection afforded by a corporation is challenged, the corporate veil is "pierced" and the personal assets of the business owners are attached. You must operate your company as a separate business, not as your personal bank. If you fail to sufficiently capitalize your business, don't conduct annual meetings and maintain proper minutes, or pay purely personal expenses with company funds, a court may determine the corporation is a sham and allow a plaintiff to reach your personal assets.  

Number  7a:                They purchase the wrong type of  or inadequate liability insurance.

You need to know what kind of insurance policy you need, and what kind you are buying. Most outfitters need a "Comprehensive General Liability" (CGL) policy to protect them from claims by injured clients or others. Is it a "Occurrence Based" policy, covering claims based on all incidents which occurred during the policy period, regardless of when the claim is made, or is it a "Claims Made" policy, covering only those claims actually made during the policy period? What policy limits are appropriate for your company? High limits may make you an attractive target for a lawsuit, but limits that are too low could allow a significant award to wipe out your company, and perhaps your personal assets as well. Make an informed business decision about the appropriate limits for your company.

Number 7b:                They fail to read the insurance policy purchased and fail to comply with the conditions of coverage.

All insurance policies set forth conditions with which you must comply if a claim is to be covered. For example, a policy may require that you have release forms translated for non-English speaking clients. Your guides may have to meet certain minimum qualifications, or you may be required to have specified equipment on your trip. If you don't know about these conditions, you may not be in compliance, and your insurance company will have the right to simply walk away from a claim. Similarly, an insurance policy may state certain activities are excluded from coverage. Once again, you need to know the scope of such exclusions so you can either avoid excluded activities or acquire extended coverage. 

Number 6a:                Clients are told not to worry about the release form they are being asked to sign as it isn't worth the paper on which it is written.

Regardless of whether the release forms are valid under the law, or under the circumstances in which they are used, if you tell a client the forms are worthless, a court is more than likely to agree with you. In most states, courts have held release forms, if worded and used correctly, can be an absolute defense against alleged negligence. If a client gives you a hard time about a release form - blame it on your attorney, that's what they get paid for. Tell them that if the form is not signed as presented, your insurance company will not cover you in case of an accident. If they still have a problem - cheerfully refund their money and send them on their way. Such clients are a lawsuit waiting to happen, and their trip fee is not worth the potential claims and expense in the event of an incident.

Number 6b:                Otherwise valid release forms are signed by non-parental adults on behalf of minors.

Minors (usually those under 18 years of age) do not have the legal capacity to enter into a contract. Thus, courts in many states have held a release form cannot be used to bar a lawsuit brought on behalf of an injured minor. Some state courts have held not even parents can sign an effective release on behalf of a minor. Release forms signed by a parent of an injured minor, however, can bar that parent from suing for the losses he or she suffers resulting from the injury or death of a child. The signature of a non-parent, unless a duly appointed guardian, may have no effect whatsoever, and may lead to significant damage claims, as reportedly was the case in a recent incident on the Wenatchee River.

Number  6c:                Nobody can find the release forms after a claim has been made.

Outfitters can get into real trouble when they don't treat signed release forms as the critical documents they are. Signed release forms can be one key to a quick resolution of an legal claim. Safeguard them carefully and retain them indefinitely. Remember - a client may bring a claim against an outfitter years after their trip.

Number 6d:                Safety talks are given by the most junior guide, or assigned as a penalty.

Safety talks can be critical for informing clients of the risks involved in your particular activity, and as well as for instructing them on what should be done in the course of your trip. Assign this task to a guide who has the ability to be heard, and who commands attention. Use a checklist so you can demonstrate the same points are always raised in your company's safety talks. This is not a job that should be looked upon as a penalty to be assigned to the most junior guide, or the last one to arrive at the morning's guide meeting.

Number 5:                Outfitters treat their guides as independent contractors when under the law they are properly treated as employees.

 Outfitters sometimes decide they want to avoid the cost of certain pay-roll expenses such as the employer's share of social security and Medicare taxes, as well as unemployment or worker's compensation insurance. By treating their guides as independent contractors rather than as employees, outfitters can reduce their pay-roll expenses - for awhile - maybe. The determination whether a guide is an employee or an independent contractor is not dependent upon the intention of the outfitter and the guide. The law sets forth a complicated test with numerous factors determining whether a worker is properly classified as an employee or an independent contractor. If you treat your guides as independent contractors when they are properly treated as employees, you will have to pay all back taxes PLUS interest PLUS penalties PLUS your own ATTORNEY and ACCOUNTANT's fees. A mistaken classification gets expensive fast. A more detailed explanation can be found in AO's Outfitters Office Guide.

Number 4:                Guides are not properly screened, trained, equipped or supervised.

An employer is usually liable for the acts of employees. Therefore, you need to be sure your guides are right for the job, properly trained and supervised. Background checks may be essential, especially for guides spending extended periods of times with clients. A guide who has had substance abuse, behavioral problems or a history of poor work performance is a source of potential liability. If the employer fails to discover such tendencies, a negligent hiring claim can be added to any other claims. You must be able to document your guides have met all state licensing requirements, and you must be personally satisfied they are qualified to operate safely in the field. Finally, only through proper supervision can you be sure your guides operate fully within your operational guidelines and limits of your equipment, and disciplined if they don't.

Number  3:                There is no emergency response plan prepared in advance, or such a plan is not properly implemented.

Sooner or later, every outfitter will have a serious incident on a trip - it simply goes with the turf. Once an incident occurs, you must be in a position to minimize the damage - to your clients, to your guides and to your company. When it hits the fan and all hell breaks loose, you need to have a reference to guide you through what needs to be done. Elements of a plan may include stabilizing the situation in the field, as well as taking the steps necessary to protect yourself after the fact in the event of threatened litigation. You need to know whom to call for various purposes, and how to deal with the news media to minimize adverse publicity. Finally - not only should an emergency response plan be prepared in advance, it should be tested so that you and your guides will be prepared to take to necessary steps and the plan will be more likely to achieve its objectives. This topic is discussed more extensively in AO's Risk Management Manual.  

Number  2:                Common sense is ignored when on a trip with commercial clients.

All too often it is easy to get caught up in the clients' exuberance for the raft trip. The bottom line is the clients don't really know what they are getting into, and they rely on YOUR expertise to get them through the trip safely. Keep the trip within the limits of your clients - don't get talked into taking unrealistic risks. If equipment is forgotten or breaks, or if you are short a guide, don't stretch yourself, your guides or your equipment beyond prudent limits. If something goes wrong when you go out on the limb once too often, the optimism and exuberance of the day's adventure will disappear under the harsh light of hindsight.

Number 1:                Outfitters and guides agree to take lawyers as clients.

There is no question that lawyers can be obnoxious clients. They think they know more than you, even though they are putting their lives in your hands. They will often intimidate you and try to get away without signing a release form or with modifying it in some way - all the while stating release forms aren't worth the paper on which they are written. Then, if they or someone in their family, or even a friend of theirs gets hurt on a raft trip, they will seek justice and accountability through the legal system. Remember: whether a lawyer or some other complaining client, one client more or less will not break you!! If you get a bad feeling from a client, or if you feel in your bones they are a lawsuit waiting to happen - don't take them on your trip. Refund their money and consider yourself lucky to have dodged a legal bullet.