Liability and Horses (Book Excerpt)

Horses often seem to be accidents waiting to happen, and everyone who has owned horses for any significant period can recount at least one horror story that starts with: "You aren't going to believe this, but ..." Less apparent, but equally true, is the realization that horse businesses, by their very nature, can be "accident prone." Agricultural jobs traditionally are among the nation's most dangerous. Whether horses are your vocation or avocation, it is important to shield yourself from as much potential liability as possible. Failure to do so can be devastating, personally and professionally.

Liability is an extremely broad legal concept, encompassing everything from an obligation to repay a debt to the responsibility everyone has for the consequences of their actions. For someone in the horse business, liability lurks behind every stall door, in every paddock, on every trail, and in every business transaction. When you buy a load of hay on credit, for example, you are incurring a liability, in this case the obligation to pay for the hay at some future point. Such liability, voluntarily assumed, is part of the normal course of doing business and is not the type of liability addressed here.

More troublesome is the potential liability that results when your actions cause harm to a third party. Liability for personal injury can include financial responsibility for medical bills, lost wages, loss of consortium, and punitive damages. Liability for damage to another person's property generally is limited to the economic value of the property, but that amount can be substantial.

The sources of potential liability are endless:

  • If you board horses for other owners, you might be responsible for damages if one of those horses becomes injured while in your care.
  • If you give riding lessons, you might be liable for injuries suffered by one of your riders.
  • If you open your land for trail rides, you might be liable if a horse or rider gets hurt on your property.
  • If you sell a horse, you may have a duty to disclose certain physical conditions of the animal, and you might be liable for damages if you do not do so.
  • If a horse escapes from your property and causes injury to a person, another animal, or someone's property, you might find yourself responsible.
  • If you lease your horse to another person, you might be liable if the horse injures the lessee.
  • If an employee becomes injured, you might be liable.
  • If you agree to transport another person's horse in your trailer, you might be liable if the horse is injured.
  • You may even incur liability by doing nothing more than keeping your own horses on your own property. This could happen if a court finds that the horses are an "attractive nuisance," and thus an unreasonable danger to trespassing children who are injured.

The list continues.

Adequate insurance is a necessity, and you should discuss your needs with a reputable insurance agent who is familiar with the horse business. It should be obvious, though, that the only way to insulate yourself from all potential liability is to abandon the horse business altogether. Few horse enthusiasts are willing to do that, however, and the next best thing is to identify potential problem areas and plan accordingly.

Accidents do happen, no matter how careful a person is, and there always is a risk you will find yourself on the wrong end of a lawsuit. Being blameless does not make you immune from a lawsuit, and being right does not guarantee you will win in court if you are sued. Even if you do win, you likely will be faced with thousands of dollars in legal bills. When dealing with potential liability, it always is better to be safe than sorry. Attorneys like having a client ask them, ahead of time: "This is what I plan to do. Are there any problems?" Attorneys dislike having a client tell them, after the fact: "This is what I did. Can you fix it?"

Practice Preventive Legal Medicine

Many attorneys endorse the concept of a "legal audit," a review of your horse business with emphasis on potential problem areas and possible solutions. If you board horses and do not require written contracts with your boarders, for example, your attorney should be able to recognize the potential problem and draft a suitable document. If you do use a written contract, your attorney can suggest changes, if needed. After reviewing your plans and aspirations, your attorney can identify and thereby help you avoid many of the pitfalls on the path to your business goals.

Whatever your objectives in the horse business -- from owning a safe and sound pleasure horse, to managing a band of productive broodmares, to competing successfully on the "A" show circuit -- you probably already rely on the expertise of a team of professionals. A veterinarian and farrier are essential members of the team, no matter what the activity, and depending on your goals, you also may need a trainer for your horse and a coach to help hone your own riding skills.

Just as important is your business team. The members should be selected with care and should include an accountant, an attorney, and an insurance agent. All should be familiar with the horse industry. A good accountant can be the difference between a business that shows a profit and one that does not, by offering financial planning and bookkeeping services and by guiding clients though the maze of state and federal tax laws, payroll questions, and workers' compensation requirements.

Attorneys and insurance agents can help guard a business investment, the former by anticipating problems and drafting written agreements to protect the owner's interests and the latter by providing adequate insurance coverage. An attorney also can help a business owner operate in compliance with local or state laws, among the most important of which are those designed to limit potential liability in certain situations.

Locating professionals with experience in the horse business can be simple or difficult, depending on where you live. Personal referrals from other horse owners in your area are probably the best recommendations, and many states' bar associations offer lawyer referral services for attorneys. It is important that the team understands your business operation and your goals. You should have the team in place before you need its services. Prevention and risk management, not damage control, should be your goals.

About the Author

Milt Toby, JD

Milt Toby is an author and attorney who has been writing about horses and legal issues affecting the equine industry for more than 40 years. Former Chair of the Kentucky Bar Association's Equine Law Section, Milt has written eight nonfiction books, including national award winners Dancer’s Image and Noor. He teaches Equine Commercial Law in the University of Louisville's Equine Industry Program.

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