I would suggest speaking with your insurance agent and getting a policy that
will protect you from having to pay out of your pocket in the future. Also,
considering you lost the waiver, it may be best to rethink your filing
system. I would keep paper records on file, but also keep a copy on your
computer and ensure that you have a good back up system in place (such as
utilizing the cloud). This will protect you from loss in the future.

Have you try talking to the guy? As you said you are a compassionate guy why not take that route. He may not be out to screw you over but was just asking for help. Also does he know that you miss place the waiver ? If he doesnt, he may be asking you for help as a human being. I would treat him like one but at the same time document everything that you spend, just pass it off for financial tracking purposes. Also do a better job in file keeping specially since your business deal will physical contact injuries are always just a few session away. Just my 2 cent worth

Thanks for your replies everyone. Please add only new ideas to this thread. You can agree with another post by giving it kudos.

Hopefully you have liability insurance. This is rather inexpensive and keeps you out of trouble. Owning a business that involves people practicing a very physical art should have prompted you to get insurance.   Now you need to find that waiver. It may protect you somewhat from being sued. You could offer the person an apology without admitting fault. See if they will accept a one-time payment from you if they agree not seek further damages. Let them know of your situation and that there's no money to be had.

Did you have insurance? Most companies have comprehensive liability insurance that deals with things like this.

your liability insurance should provide cover by default, assuming you have some, but as mentioned earlier there may not even be grounds for a claim to be made if your situation is defensible.

Call your insurance agent about your liability insurance and let them handle it. Meanwhile get your filing system in order and make copies of the waivers and keep them offsite so you have a backup in just these cases. And, of course talk to the injured party especially about assumption of risk. When I go to my daughter's softball game and sit in the stands I assume that I could be konked with a ball. In karate I would think a person would be aware that there are risks as well.

I think you should directly have some words with the injured person. You may explain your financial situation to him and his parents. See it was not your fault and such injuries happens in martial arts program. If people start asking money help like this then everyone will close its shop. Better to make an computer database for all your scanned documents. It will help you in the future.

This is truly why people hate lawyers.  NOTE TO PUBLIC .. You don't have a viable lawsuit every time you are hurt.  You may have a FRIVOLOUS lawsuit but that is all.  If you did not do anything negligent then don't roll over to this claim..Fight it ... You will make America a better place.  Remember, I do this for a living & I hate people who think they can sue because they were hurt due to their own foolishness. The most ridiculous call my office has ever received was a call wherein someone wanted to know who to sue because she was swimming in the ocean and cut her foot on a rock....my suggestion was that she try to sue God.

I am a California Attorney and thus cannot advise you on Florida Law.  However, Google 'Assumption of the Risk'.  By your description of the issues I wouldn't pay this clown a penny!