I can tell you what the world would be like, but you'll have to sign a waiver first !!
Seriously the liability could be quite high but like you I loan gear out quite often. Unfortunately for us, we live in a very litigious society where anyone can be sued for practically anything. That being said, lets take a practical look at the situation.
Loaning any gear that is in good and serviced condition to a student is generally a pretty safe bet. The student is in (read that SHOULD BE in) a controlled environment while with his/her instructor(s) and dive master(s). Loaning any gear to someone doing open water diving is another matter all together. You are more liable when loaning life support gear like regulators, tanks or BCs than non-life support gear such as knives, lights, cameras and the like. The reasons should be obvious. The big consideration for me is WHO am I loaning gear to and what is the likelihood they will encounter problems with the gear. This must be done on a case-by-case, day-by-day basis.
Let me give you an example of how out of hand these types of things can get. Several years ago an instructor at a shop I was involved in what is best described as an incident. The instructor had a female advanced open water student at the lake. There were supposed to be three students but two didnt show so it was essentially a private class. Anyway the students boyfriend, a newly certified open water diver, came on the trip with her. Long story short. When the instructor and student were headed out for the deep dive portion of the class, the boyfriend wanted to tag along. The instructor flatly refused and demanded that the boyfriend remove his gear. As he did this the instructor and student proceeded to the water. At about 80 feet, low and behold, here comes the boyfriend headed straight down. The instructor attempts to grab the guy and pursues him to 100 feet to no avail. The instructor cant take the student past 100 feet so he cant go any further. The instructor surfaces with the student and immediately begins search and rescue efforts with 50 or so other divers. No body is found and after several hours of searching by divers on site and the local professional SAR dive team. The instructor is cleared by the certifying agency 30 minutes after he exits the water and no criminal charges are pressed.
I was not the instructor or the shop owner so what does this have to do with liability? I was named and subpoenaed in the civil case brought by the mans family and thus had to hire an attorney. Who was I in this
I was the guy that did the visual on the shop rental tank the INSTRUCTOR had on his back at the time. The plaintiffs lawyer was grasping at straws in a case he ultimately lost (and Im sure was handsomely paid for the failure). So one man died, the lawyers made out and everyone else paid up.
The moral: Life can be tricky. Use your head and proceed at your own risk.
:boom:
Marc