Are you a member of a horse club—or any other club, group, association, or membership organization for that matter? Worse yet, did you let yourself get talked into (or flattered, guilt-tripped, bribed, manipulated, drafted or heroically charged into) becoming an officer or a board member?
If so, my condolences.
Well, now that you’ve agreed to volunteer, and if you can’t weasel your way out of it, then you may already suspect that, to quote Spiderman (and Justice Elena Kagan, who also quoted Spiderman): “with great power there must also come—great responsibility”? (Yes, the US Supreme Court has quoted a comic book, who says the law has no sense of humor?)
Admittedly, in the case of a local horse club, it’s minor power at best, and often minor responsibility; but even with minor responsibility comes great potential for personal liability unless you take appropriate precautions. I have been ranting about this in various horse clubs I’ve been in for years, as many clubs are very careless about incorporating, even more careless about keeping their incorporation current, and some even question the absolute necessity to have proper insurance for their activities and events.
Some people think that Montana’s Equine Activity Liability statutes mean “you can’t get sued if someone gets hurt by a horse.” WRONG. First off (as I am often reminding my clients), anyone can almost always sue anyone else for any reason. Nothing stops a person from walking into the local courthouse and filing a lawsuit, even if the reasons are not legally supportable. They might lose, but in the meantime, if they name you, you must respond or risk a “default judgement” – a ruling in their favor because you didn’t show up to defend yourself!
“It is the policy of the state of Montana that a person is not liable for damages sustained by another solely as a result of risks inherent in equine activities if those risks are or should be reasonably obvious, expected, or necessary to persons engaged in equine activities.” (emphasis added) The statutes go on to define “risks inherent in equine activities”, “equine professional” and other terms very carefully and outline limitations on liability.
Montana law also contains a major caveat: “It is the policy of the state of Montana that an equine activity sponsor or equine professional who is negligent and causes foreseeable injury to a participant bears responsibility for that injury in accordance with other applicable law.” (emphasis added)
In other words, ouch. All anyone has to do is allege negligence or foreseeable injury and they are not only over the threshold of the courthouse, they probably “state a claim for which relief can be granted” (thus surviving the first challenge to a lawsuit, what we lawyers call a Rule 12(b)(6) motion to dismiss). So if you are personally named in a complaint, you most likely will need to pony up a deposit with your friendly neighborhood tort defense attorney to answer the complaint—unless you or your club has insurance coverage that pays for the lawyer.
So, there are two steps that help protect you. First, if you are a member of a club, be sure your club is incorporated (usually as a nonprofit corporation) and KEEP YOUR INCORPORATION CURRENT! Your club needs to register as a corporation (and even not-for-profit clubs are a corporate “business entity” in this respect) AND your club must also file annual reports (people often forget about the annual report requirement). While a corporate shield doesn’t completely protect you from personal liability, it is a critical first line of defense.
Second, liability insurance is also a must. Just like health insurance, which doesn’t prevent illness or injury, it just pays for medical care if you need it; liability coverage does not prevent someone from filing a lawsuit, but it pays for an attorney.
Horse accidents are not uncommon at events a horse club might sponsor, and if incorporation and insurance are not in place, YOU as an individual club member could be financially liable in the event of an accident! (Usually officers and directors are most at risk, but a person with an injury might reach out for any legal remedy they can find, so incorporation and insurance protects all club members). Event liability insurance is not terribly expensive and is well worth the price. Some clubs also obtain liability insurance for their officers and board of directors, especially if they handle big events or significant amounts of money.
Consult an attorney for more information on club member liability and incorporation. Talk to an insurance agent about appropriate coverage.
If you want to learn more about becoming a nonprofit corporation in Montana, the Montana Secretary of State’s web site has more information.
Read more on club liability here, from The Horse:
Are Horse Club Boards Liable for Club-Related Injuries?
Copyright 2016, Brenda Wahler
Please read my general disclaimer. This article is premised solely upon Montana law. If you do not live in Montana, some of the material contained herein may not be applicable in your jurisdiction. Please consult an attorney licensed in your state for personal legal advice.