OceanGate Case Illustrates the Murky Waters of Liability Waivers

4-minute read

It’s hard to imagine that, in the history of liability waivers, any liability waiver has ever gotten more attention.

We’re talking, as you might have guessed, about the waiver signed by passengers aboard the ill-fated, 22-foot submersible that apparently imploded near the shipwrecked Titanic, killing all five aboard.

Among those who perished: Stockton Rush, the founder of the deep-sea travel company OceanGate who, we’d guess, made sure each of his passengers had signed the waivers required for anyone willing to pay OceanGate $250,000 for the ride to the bottom of the sea.

Liability waivers, also known as “release of liability” agreements, are common in many sectors of business. But how good are they, really?

An executive producer of “The Simpsons” TV show, Mike Reiss, became a household name after the disaster when he told news reporters he had taken four OceanGate trips (not all to the Titanic) and that its “waiver … mentions death three times on the first page.”

Liability waivers, also known as “release of liability” agreements, are common in many sectors of business. These agreements are intended to protect businesses from lawsuits by having individuals sign them to agree not to sue the business if they get injured or suffer damages while using the business’s services or products.

The effectiveness of liability waivers, however, can depend on several factors. Among them:

  1. Jurisdiction: In some areas, such waivers are generally enforceable, while in others they may be viewed with skepticism or may not be enforceable at all.
  2. Language and clarity: For a liability waiver to be effective, it needs to be clearly written and easy to understand. If the language is too complicated or the terms are not clearly defined, a court may find it unenforceable.
  3. Scope: Waivers that attempt to disclaim liability for all types of damages, including those caused by the business’s own negligence or intentional misconduct, is unlikely to hold up in court. Courts often find such broad waivers to be “unconscionable” and therefore unenforceable.
  4. Informed consent: For a waiver to be valid, the person signing it must fully understand the risks they are agreeing to assume. If the person wasn’t given a fair opportunity to understand the waiver, it may not be enforceable.
  5. Public policy: Even a well-drafted liability waiver may be unenforceable if it is against public policy. For example, a business generally cannot use a waiver to shield itself from liability for illegal activities or gross negligence.

In short, while liability waivers might provide some level of protection for a business, they are not foolproof, not by a mile.

In the OceanGate case, it’ll no doubt be left to the courts (or at least the lawyers for the families and those representing the company’s insurance companies) to sort out these questions, starting most likely with whether OceanGate acted with reckless disregard for the safety of its passengers.

If this tragedy at sea illustrates anything at all, it’s that liability waivers offer less protection than you might think and that, yes, it’s always important to have adequate insurance coverage and safety procedures in place.

The Mahoney Group, based in Mesa, Ariz., is one of the largest independent insurance and employee benefits brokerages in the U.S. An employee-owned organization, we’ve been providing our clients with the confidence to face whatever lies ahead for more than 100 years. For more information, contact us online or call 877-440-3304.

Scroll to Top