When fun on the rapids turns into a guide’s liability

The stretch of the Guadalupe River in Central Texas near the town of New Braunfels is a popular, easy waterway for rafters and tubers seeking fun and relief from the normally searing summer sun. Floating the river is usually a lazy occupation; with enough low-level rapids to keep it interesting, avoiding groups of beer-guzzling tubers is often the biggest challenge. Record rains in the summer of 2007, however, turned recreational activities on the Guadalupe into a much greater challenge and, in at least one case, led to a death.

A rafting fatality during a guided trip on a relatively benign section of waterway highlights the kinds of liability risks faced by whitewater river outfitter and guide operations, which are “liability driven,” difficult classes of business to insure, according to Glenn Sudol of Westminster, Colo.-based Gillingham & Associates.

Risks run the gamut from twisted knees to heart attacks or drownings, says Jim Sattler of Sattler Insurance Agency in Lewiston, Idaho, which has been serving the outfitter and guide recreation industry for 29 years.

Still, despite the safety issues related to whitewater activities, the market is currently fairly competive. Since the spring of 2000, Sattler said, more companies have been willing to entertain these risks. Availability is up and pricing is down in areas such as liability, property and commercial auto. Inland marine, which covers moving property such as rafts and other equipment, remains more or less flat, Sattler explained.

Sattler doesn’t see a lot of claims in the commercial auto area with these accounts, they often involve minor physical damage such as backing into parked cars in a lot. But Sudol said river outfitters can have auto liability issues due to the types of vehicles they use to move people and equipment around, mostly older buses and 15-passenger vans.

Gillingham & Associates has specialized in outdoor recreation risks since the early 1990s. Sudol, a former fishing guide, said his company looks for operators with “good solid management experience. That’s pretty much it in a nutshell. We’re looking to pick the best operators in a difficult class of business. And we do that by historical loss information, and standard operating procedures of the outfitter.”

All waivers are not the same
Sattler’s firm also wants to know what types of pre-trip agreements operators have with their customers, such as a release or hold harmless waiver.

Hold harmless waivers or liability releases are standard operating procedure for whitewater outfitters, according to Sudol and Sattler. However, all liability waivers are not the same. They vary by state in their wording and effectiveness.

Waivers accepted by the permitting agencies that allow access to government controlled waterways, such as the National Park Service, the Bureau of Land Management or state park services also may differ, Sattler said. “The governing body may have a particular type of client agreement they will allow, or several they will not. Some will not allow for a release. … You have either an assumption of risk or an acknowledgement of risk. … It depends on that permitting body and their guidelines.”

Nevertheless, Sudol said “it definitely is an underwriting requirement that the commercial accounts have liability waivers signed by their clients to partake in recreational activities.”