This is the second part of a series on protecting against the potential risks associated with equine liability under Minnesota law. Last month, we discussed the protection provided by Minnesota’s equine liability statute, Minn. Stat. § 604A.12, and the limits of those protections. This month, we provide guidance and practical tips as to how you can further limit your liability beyond the statutory immunity.
You’ve heard it before and you’re going to hear it again — one of the best ways to limit your liability (and protect your rights generally) is to put your intent in writing. That means foregoing the “handshake” deal and using written documents for releases of liability, sales and leases, boarding, employment, training, etc. Ensuring your written agreements accurately reflect your intentions, and are enforceable under the law, is critical to limiting your liability exposure.
Under Minnesota law, an agreement that intends to release, limit, or waive the liability of a party resulting from conduct that constitutes “greater than ordinary negligence” is against public policy, void and unenforceable. Minn. Stat. 604.055, Subd. 1. However, a party can still agree to release, limit or waive liability for damage, injury, or death resulting from “ordinary negligence or for risks that are inherent in a particular activity” and those involved in equine related activities are legally permitted and therefore should always use releases to protect themselves from these risks.
In using written documents to limit your liability, consider these practical tips:
• Clearly state what the document is providing (e.g., waiver/release, lease agreement, purchase agreement, boarding contract, etc.).
• Identify the parties to the document, including every individual and entity being released.
• State the effective date or term of the agreement (except for liability waivers and releases as they should not contain an expiration date).
• Precisely define the scope of the release, the inherent risks of the activity and which specific risks are being released.
• Confirm that the signor has read the document in full before signing it and has “legal capacity” to sign it (e.g., is not a minor).
• Require all visitors and guests to sign a release, not just participants or riders.
• Maintain copies of your executed documents.
To ensure your release language is enforceable under Minnesota law, you should consult with an experienced attorney. In addition to drafting effective agreements and releases, lawyers can advise you as to other effective risk management tools, such as determining whether you should set up and operate under a separate legal business entity (e.g., a limited liability corporation or corporation), and whether you are properly insured for your equine activities.
It is important to remember that even if you have implemented “best practices” to limit your liability, there is nothing to stop someone from filing suit against you. If you are ever sued for an equine-related incident, having the appropriate insurance can help protect you and your assets.
Most liability insurance policies provide defense and indemnity coverage. Defense coverage means the insurer will provide you with an attorney to defend you against a lawsuit covered by the policy. Indemnity coverage means the insurer will pay any judgment or settlement you are required to pay, and that is covered by the policy, up to the applicable limit of insurance.
Equine business owners should consult with an attorney and insurance professional to ensure they are adequately protected. Personal horse owners should purchase liability insurance that will provide defense and indemnity coverage in the event of a lawsuit.
Next month, we will discuss ways to transfer your potential risk to another party through indemnification agreements under Minnesota law.
Suzanne Jones and Yvonne Ocrant are partners with the law firm Hinshaw & Culbertson LLP. The information in this article is intended for informational purposes only and is not for the purpose of providing legal advice.