We all fear liability. Liability can mean lawsuits, trials, unpredictable jury verdicts, and the potential for serious financial liability. Everybody has the ability to take active measures in an effort to avoid liability. This article explores eight practical strategies for avoiding liability.

1. Understand What Causes Liability

Everyone, it seems, offers opinions on liability in the horse industry. Many, for example, call the equine liability laws "zero liability laws." Some say that these laws have permanently ended all liability in the horse industry and have somehow made liability insurance obsolete. These statements are pure fiction; they originate from people who have never seen the law. Those who rely on these statements could learn the hard way that they have been seriously misinformed.

Why allow unfounded opinions to steer you wrong on something as important as liability? In a continuing effort to avoid liability, it helps to separate fact from fiction. In this connection, consult with a knowledgeable lawyer. Learn about liability through books, articles, and seminars.

2. Develop Your Own Personal Safety Program

A constant dedication to safety will reduce the risk of injuries and, consequently, liability. Through a series of safety-conscious habits and practices -- implemented routinely -- you can lessen the risk of liability. Elements to consider for a safety program can include numerous things. Here are two ideas to help get you started:

Regular equipment inspections. if you provide tack or equipment to others, chances are good that you are at risk for liability if the equipment is blamed for causing an injury, and the injured person claims that you knew or should have known about defects in the equipment. Many of the equine liability laws now impose liability under these circumstances. Knowing this risk is a good incentive to stay a step ahead. Regular equipment inspections, will help keep your equipment in good condition and avoid liability on this basis.

Train your workers well. As a general rule, a business is liable for the negligent acts its employees commit during the course of their employment. With this in mind, your own dedication to safety is a good start; make sure that all of your workers share it.

3. Don't Be Afraid to Use Liability Releases

Contrary to popular belief, most states across the country have enforced releases of liability (also called a "waiver") IF they are properly presented and signed. This author has written numerous articles on this subject over the years.

Those attempting to control liability would be wise to consider using carefully worded releases of liability. Form contracts found in books and sold in stores are, at best, a starting point; there is no substitute for a release that has been drafted by a knowledgeable attorney. And, of course, remember that having a release is never a substitute for having good insurance.

4. Good Insurance

Certainly, insurance will not prevent liability (although some insurance companies might help you find ways to avoid liability). What insurance will do is help save your home, your savings, and your property in the event that a claim or a lawsuit is brought against you for which the policy applies. At the very least, insurance could spare you the enormous cost of a legal defense.

5. Read Your Equine Liability Law Carefully

Chances are good that you have an equine activity liability act in your state, or in states where you do business. As of February 1, 1999, 43 states across the country have passed laws that, in some way, limit or control liabilities in their horse industries. Read your law very carefully. Pay particular attention to the law's exceptions. All of the laws differ, but the most commonly found exceptions state that an "equine activity sponsor," "equine professional," or possibly others are at risk of a lawsuit if they: 

• Provide faulty tack or equipment that causes injury, death, or damage

• Fail to properly determine the rider or handler's ability to safely manage an equine

• Have land or facilities on which equine activities take place that have a dangerous non-obvious condition but for which no noticeable warning signs were posted

• Exceptions in some laws may allow liability for "gross negligence' or intentional wrongdoing. A small number of laws allow liability for "negligence."

6. Watch for Equine Liability Law Sign Posting Requirements

If an equine activity liability law affects you or your business, look for sign posting requirements and make sure that you comply. These requirements vary considerably from state to state and there is simply no "one-size-fits-all" sign for nationwide use. To illustrate how these requirements vary, Indiana's law requires signs to state:

WARNING

Under Indiana law, an equine professional is not liable for an injury to, or the death of, a participant in equine activities resulting from the inherent risks of the equine activities.

The Texas law, in comparison, requires citation of the statute:

WARNING

UNDER TEXAS LAW (CHAPTER 87, CIVIL PRACTICE AND REMEDIES CODE), AN EQUINE PROFESSIONAL IS NOT LIABLE FOR AN INJURY TO OR THE DEATH OF A PARTICIPANT IN EQUINE ACTIVITIES RESULTING FROM THE INHERENT RISKS OF EQUINE ACTIVITIES.

7. Watch for Equine Liability Law Contract Language Requirements

Many of the equine liability laws also require that certain language (often, but not always, the language required for warning signs) be repeated in various contracts. Equine professionals are usually targeted for this requirement.

8. Consider Incorporating

Establishing and maintaining a corporation, just like having insurance, will not prevent liability, but the corporation could save your home, savings, and property if a lawsuit is brought against you.

As this author has written in past articles, those who fail to take their corporation seriously run a risk of having the corporation disregarded in a court of law. Those who establish corporations would be wise to follow formalities typically required of corporations, such as filing annual reports with the state of incorporation, using separate corporate banking accounts, and undertaking separate bookkeeping for the corporation.

This article does not constitute legal advice. When questions arise based on specific situations, direct them to a knowledgeable attorney.

About the Author

Julie I. Fershtman is an attorney serving the horse industry for several years. She is rated "AV" [highest rating] in the Martindale Hubbell Law Directory, and her biography is published in Who's Who in American Law. She can be reached at (248) 644-8645.

Ms. Fershtman is the author of Equine Law & Horse Sense, the nationally-acclaimed book, which sells for $17.95 +$3 shipping and handling (Michigan residents add 6% sales tax). Contact Horses & The Law Publishing at (800) 662-2210 or send check or money order to Horses & The Law Publishing, P. O. Box 250696 Franklin, MI 48025-0696.

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