"Equine Activity Liability Act; Do I Still Need Insurance?"
By Robert A. Hoffa, Esq.
Many times I am asked, "My state has an Equine Activity Liability Act (EALA)
-- do I still need insurance?" The answer is absolutely.
Forty-four states have adopted an Equine Activity Liability Act of some form.
The concern is, many people believe that because an EALA is in effect in their
state, they cannot be sued. That simply is not true. There is not someone
standing at the courthouse telling a person that he or she cannot file a suit
because it involves an equine activity. EALAs do not prevent someone from suing
you regardless of how frivolous the claim may be. All that is required to file
suit against another person is to go to the courthouse, pay the filing fee and
file the Complaint. Once suit is filed, you are under an obligation to respond
to the claim within a fixed time period, or a judgment may be entered against
you. If you are insured under a liability policy for your equine business, the
insurance company will retain an attorney to represent you. The insurance
company will pay the costs of legal representation. If, however, you are
uninsured, you will either have to defend yourself against the suit or hire an
attorney and pay for the representation out of your own pocket. While this is
not the most important reason to have liability insurance, it certainly is a
There is little doubt that the passage of these Equine Activity Liability
Acts is probably the best legislation the equine industry has seen. What the
EALA does, is provide you with a defense to claims relating to certain equine
activities. These statutory defenses enable you to have some cases dismissed
early in the litigation process by what is known as a Summary Judgment Motion.
In essence the court decides, rather than a jury, that there is no legal basis
for this claim and dismisses it as a matter of law.
In order to receive the protection of the EALA some states have requirements
for posting of signs and/or written releases warning of the inherent dangers
involved in equine activities. These requirements differ from state to state.
You have to make certain you comply with your state`s requirements, or you will
not be provided the protection and the defenses that the Act was designed to
give you. That does not mean you automatically lose any case filed against you
but rather, makes it more difficult to defend the claim. Like most things in
law, there are exceptions to EALA protection. Exceptions from immunity to
liability may include an allegation that you provided the person with a horse
that was not suitable for his or her riding ability, provided faulty tack, were
grossly negligent, or the person suing you may have been a spectator. Some EALAs
do not provide protection if the person injured was a minor even though they
were involved in an equine activity. Most of the statutes only apply to
participants in equine activities. That definition varies from state to state.
While the intent of these acts was to protect the equine activity sponsor,
trainer or farm owner, you can see there are many legal loop holes which will
still expose you to liability. Even if you have complied with all of the
requirements for EALA protection, you may still be exposed to liability because
the Plaintiff falls into one of the exception categories.
Defending lawsuits can be a costly undertaking. You incur expenses for
witnesses, filing fees, court costs and legal fees. Even if you win the lawsuit,
you do not get reimbursed all of your expenses. The key is to protect you, your
property and your other assets from these types of claims. Even if you have the
protection of a corporation or a limited liability company, you still may be
exposed to personal liability if the person making the claim can show that you
did not comply with your state`s requirements for corporate protection. This is
commonly known as piercing the corporate veil. While corporate protection may
help you, it is not the same as having insurance protection. A good liability
policy tailored to your particular needs will protect you, your investment and
your assets. When you are insured, your insurance company will be responsible
for the costs of your legal representation and any judgment or verdict that may
be entered against you up to your policy limits.