Legally speaking: Protecting your company in case of severe weather

Question: My company rents tents and inflatables. Given the continued rise in the number and severity of weather-related events, I’m concerned about being sued in the event of a collapse or other similar incident. What can I do to protect myself legally?

Answer: Your concern is well-founded. Severe weather events have seen dramatic increases in both number and severity since about 1980 (see chart below). As the number of severe weather events continues to grow, so does the number of tent accidents and injuries to event patrons, usually followed by associated lawsuits.

Inflatables have suffered a similar fate. A recent study published in the Journal of Pediatrics found that the number of inflatable-related injuries rose 1,500 percent between 1995 and 2010. In fact, according to the same study, the rate of these injuries more than doubled between 2008 and 2010.

Adding to the risk is the fact that many customers are frequently inexperienced — often homeowners, schools, military installations, governmental organizations and/or corporate customers with only limited event rental requirements.

Given the current litigation environment, rental operators now face an alarming array of potential lawsuits.

A single weather event and/or one mistake can result in a catastrophic loss, making this question both timely and critically important.

From a legal exposure standpoint, rental operators can do a great deal to protect themselves. The following are some practical considerations that can help reduce your legal exposure:

  • Make certain you, the rental operator, have adequate liability insurance, including “products liability” or “products completed operations” insurance, if possible.
  • Make certain the manufacturers of your products have adequate products liability insurance and are willing to provide you with an insurance certificate.
  • Be choosy about the items you purchase for rental. For example, bounce houses, dunk tanks, carnival games, casino games, and vending and concession machines are generally relatively easy to insure, while it may be difficult or impossible to insure inflatable slides, rock climbing walls, bungee jumps, trampolines and batting cages.
  • Get engineers’ certifications from the manufacturers regarding applicable ASTM Standards, including ASTM F2374 for inflatables, and when available, ASTM WK45190 proposed standard for temporary tents.
  • Factor into your rental process the assumption that your customers will often be less experienced than other rental customers, such as contractors who may have more frequent rental needs, and provide information and explanations based on that assumption.
  • The following are a few of the more important contract provisions in your rental contract or via contract addendum:
  • Include a written acknowledgment of the customer’s receipt of all necessary instructions and warnings, including NFPA 101, OSHA 1910.38, International Fire Code (IFC) and International Building Code (IBC) standards.
  • Obtain the customer’s agreement to comply with all applicable laws, rules, regulations and codes.
  • Include an acknowledgment of selection, receipt, examination and acceptance of the rented item(s) by the customer.
  • Include a “warning” regarding the potential dangers associated with the use of tents, inflatables and other temporary structures, as applicable, particularly during severe weather.
  • Include a provision acknowledging the customer’s “assumption of the risks” associated with renting and using the tent(s), inflatable(s) and/or other temporary structures.
  • Include an enforceable warranty waiver, waiving all “express and implied” warranties by the rental operator.
  • Include your own “liability disclaimer.” This will typically not be effective for personal injuries, but can limit breach of contract and property damage claims.
  • Include an enforceable provision requiring the customer to “indemnify, defend and hold harmless” the rental operator.
  • Whenever possible, though typically not with respect to homeowners, require customers to maintain, at a minimum, their own liability and property damage insurance, and perhaps “host liquor liability” or “Dram Shop” insurance, naming you, the rental operator, as an “additional insured and loss payee,” waiving subrogation and being “primary.”
  • Include the customer’s agreement to post an OSHA-compliant “Evacuation Plan” and to evacuate the tent(s), inflatable(s) or other temporary structure(s) in the event of severe weather.

The best advice I usually can give any rental operator is to get out in front and out of the way of these issues while you have the opportunity, meaning before you rent temporary structures.