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November 18, 2009

Equine Activity Statutes Aren't Bulletproof When It Comes To Protecting Yourself

You’ve seen the sign on the wall at your barn. It reads something like, “Under state law, an equine activity sponsor is not liable for an injury to, or the death of, a participant in equine activities…”

Those signs usually signify that your state has some form of equine activity statute. Only four states are without such a law—California, Maryland, Nevada and New York.

But what does an EAS do for you as a horse owner? Does it really protect you and your property from equine-related liabilities? In fact, no EAS provides total immunity from personal injury liability. Every EAS is unique, each has different requirements, and each provides different protections, so it’s critical to understand the EAS in your state.  And, even without an EAS, the law generally provides some protection through the doctrine of the “assumption of risk,” which provides a possible defense to a legal claim. Knowing the letter of the law is crucial to protecting yourself.

In general, EASs provide some level of protection from liability for injuries to people participating in equine activities. The protections are based on the idea that those involved with horses understand riding is a dangerous activity, and some risks exist that can’t be avoided. Therefore, these statutes say, in general, that someone else can’t be held liable if a person is injured because of an inherent risk associated with the activity.

Every EAS is different, and you should become very familiar with the requirements, protections and limitations of the EASs in any state in which you participate in equine activities. Most states require some form of warning or notice be given to equine participants. This often includes requiring those signs mentioned above at equine facilities, specific contract language or both. For example, Pennsylvania requires a minimum of two signs, 3 feet by 2 feet, which read,

YOU ASSUME THE RISK OF EQUINE ACTIVITIES PURSUANT TO PENNSYLVANIA LAW.

Ohio, on the other hand, requires a written warning detailing the inherent risks of equine activates, while Michigan demands specific language be included in both signs and all written contracts.

It’s also important to know to whom the law applies and what limitations exist. In Maine, for example, the EAS provides protection from liability for injuries to participants and spectators. Whereas Oregon specifically excludes injuries to spectators. Similarly, Arizona’s EAS only applies if the injured party was in control of the horse at the time of the incident, and only so long as the person (or the guardian of a minor) had signed a release. Taking a different approach, Pennsylvania’s EAS applies only to adult participants, whether or not they had signed a release.

For those in states without an EAS, or if the EAS does not apply, there may still be some protection provided by the doctrine of “assumption of risk.” This concept applies to almost every athletic endeavor. For example, in football, a player who tackles a ball carrier, who is then injured on the play, cannot normally be liable for the injury sustained. That is usually true even if there was a penalty on the play.

The “assumption of risk” in the equine context is well illustrated by considering the ever-chaotic warm-up ring. If a competitor, while warming up, falls and is injured because another rider failed to properly yield, the offending rider is not typically going to be liable for the injury because the injured rider knew that riders sometimes make mistakes and fail to yield, and knowing that risk, chose to use the ring anyway.  

Of course, no EAS is bulletproof, and neither is the doctrine of “assumption of the risk,” so if you are an equine professional, horse enthusiast or property owner, there are at least four things you can do to help protect yourself:

•    Avoid injuries and deal with them properly
•    Consider a limited liability entity
•    Buy appropriate insurance coverage
•    Use a well-crafted release from liability form

The best way to avoid a lawsuit is to avoid the injury. That means developing, following and regularly reviewing safety policies and procedures. A rulebook on a shelf in the office that gets dusted off once a year isn’t going to cut it. You and every employee, volunteer, boarder and student must know what the rules are and follow them every time.

These policies and procedures should cover (at a minimum):

•    How a rider or participant’s prior experience is evaluated and recorded
•    What information is kept in a horse’s file (notes on abilities and training, soundness, vet records, and vices)
•    How incidents and accidents are handled

That last point is particularly important. When an accident occurs, there should be a system to record it—what happened leading up to and including the incident, who was involved (horses and people), whether any injuries were sustained, and how those injuries were treated. It’s also important to create an emergency action plan for when serious accidents occur. If an injury leads to a lawsuit, these records will be available to show that you acted reasonably to prevent the injury, and that proper steps were taken once the accident occurred. These records also allow you to evaluate and improve your safety procedures.

There are organizations and experts that can help you develop or evaluate your current procedures, and it’s important to update your procedures regularly to incorporate industry best practices. Local equine clubs, extension agents and colleges with equine programs may be good resources in that regard.

For some it may be advisable to form a limited liability entity, such as a corporation or limited liability company (LLC), under which to conduct equine operations. Generally, a limited liability entity’s creditors, including a successful plaintiff, may only recover damages from the entity itself, which can provide significant protection for an equine enthusiast’s personal assets. Whether a limited liability entity is right for a particular situation is something to discuss with an attorney, who can help you with these decisions and complete the proper documentation. It’s also extremely important to follow the required legal formalities throughout the entity’s existence, otherwise its separate legal identity may be ignored, and the owner’s personal assets may be exposed to additional risk.

Insurance for equine professionals, horse enthusiasts and property owners is available from a number of companies. Policies are generally based on the scope of a particular individual or business’s activities and operations. There are policies designed for backyard horse owners, as well as for large commercial breeding and training programs. It’s best to contact one of these companies to discuss the coverage best suited for your situation.

Finally, a good release is critical. It should clearly spell out the inherent risks assumed by the participant or spectator, and in general will expressly release the facility, the owner, the employees and any independent contractors from liability for ordinary negligence. However, every state treats release forms differently, and it is, therefore, important to have an attorney draft yours and to review it regularly to insure its compliance with all applicable laws. It is very dangerous to “borrow” your release form from the Internet or other common source, as they are often intended for use in a different state or in a different context.

In addition, the execution of the release form is critical. You must make sure that the person signing the release has the authority to do so and actually reads the form. An employee of the facility should be present while the participant reads and signs the form.

A difficult problem arises for people who work with minors. Generally, a release signed by a minor is not enforceable, and an injured minor may have until well after their 18th birthday to file a lawsuit. Additionally, depending on the state, a parent or guardian may or may not be able to sign away the rights of a minor. However, parents generally have their own rights with regard to injuries to minors, as they are the ones who would pay the medical bills for an injury. Therefore, it is generally advisable to have the minor and both parents sign the release. This makes it clear that each parent is expressly releasing you from liability, and in states where it applies, effectively releases you from liability to the minor. It may also be helpful to show that an older minor understood the risks involved and still chose to participate.

In summary, if your state has an EAS, that’s great, but don’t assume it offers blanket immunity, because it does not. It is important for you to become familiar with the EAS in any state in which you participate in equine activities.  If there is no EAS, it’s not as bad as it seems, and the assumption of risk doctrine can be a strong defense to liability.  Regardless of the state, or whether an EAS applies, taking additional steps to protect yourself is a wise idea. First, develop, follow and update safety policies and procedures. Second, consider a limited liability entity. Third, get appropriate insurance coverage for your activities. Fourth, have and use a well-drafted release form with every client, student, competitor, participant and visitor you deal with. Doing so will help assure that you have the best possible defense against liability claims.

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