I’m Not a Boarding Stable, But…

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146 – May/June, 2017

by Julie I. Fershtman, Attorney at Law

A backyard horse owner named Jane boards a few horses during the winter months. Jane’s facility has box stalls and an indoor arena, making it desirable during the snowy winter months where Jane lives. Jane doesn’t view her activities as a business. She views herself as earning some extra money and helping friends.

What could go wrong with this arrangement? Plenty.

Legal Standards Can Be Higher for Businesses

In the eyes of the law, even if Jane’s business is intermittent, it’s still considered to be a business. Consequently, if a customer or visitor is injured on the property, a lawyer will seek to hold Jane to the legal standards of a business. This can be a problem with premises liability cases (such as slip and fall cases). If a visitor or customer slips and falls on ice in the barn’s parking area and accuses Jane of failing to take reasonable precautions, that person’s lawyer will probably seek to hold Jane to a higher standard of care that businesses owe to their customers.

Contract Limitations

People in Jane’s situation sometimes assume that a release (where allowed by law) and a boarding contract are all they need for protection against claims and suits. That assumption is wrong for a few reasons:

• One day, a boarded horse might escape from the pasture, wander onto a nearby road, and injure or kill a motorist. But the motorist never signed the stable’s release.

• If Jane’s contract had indemnification and “hold harmless” provisions, through which the boarder agrees to protect and defend Jane if a third party makes a claim, Jane might assume that the injured motorist’s claim now becomes the boarder’s
problem, not hers. Jane might assume, for example, that these clauses make the boarder responsible for paying her legal defense costs, settling out the matter, paying a judgment, or dismissing the lawsuit. The problem is, even if Jane’s boarder has liability insurance, that policy probably will not cover
Jane in these situations.

• If the boarder’s liability insurance is unavailable or non-existent, the boarder may lack the funds to protect Jane.

• People who sign releases can, and sometimes do, file lawsuits.

Depending on the applicable state law, the language within the document, the nature of a particular claim, and how the document was signed, the release may cause the claim to be dismissed. Still, if Jane is sued, she’ll need a lawyer to defend her and enforce the release. Jane might lack the funds to do this.

Insurance Problems

If Jane has no insurance coverage for a business activity on her property, her homeowner’s insurance policy will likely offer her no coverage for a boarder’s slip and fall claim or the motorist’s injury claim because homeowner’s insurance policies typically have a “business pursuit” exclusion.

Click here to read the complete article
146 – May/June, 2017