A common concern for landowners across the country is how to ensure they are protected from liability if someone is injured on their property. In fact, in one morning last week, I got three emails from landowners asking what they could do now to be in a position to best defend themselves in the event an injury does occur on their land.
Importantly, there is no silver-bullet that will ensure a landowner will not ever be liable for anything. Additionally, there is nothing a landowner can do to make it impossible for another person to file a lawsuit against the landowner. There are, however, numerous steps landowners can take to limit liability and protect their operations from this concern.
Carry liability insurance.
This is the most important step a landowner can take in order to protect his or her operation. Every landowner needs to have a liability insurance policy that covers every activity taking place on the property. For example, if a landowner has a farm and ranch policy, but also conducts other activities like a roadside fruit stand or guided hunts, the landowner should confirm that the additional activities are covered by the farm and ranch policy’s provisions. How much insurance should a landowner carry? Well, in typical attorney fashion I’ll say that it depends. Landowners should consider the amount of risk associated with their operation. For example, a farm in the middle of nowhere that does not host any sort of events or have any guests would likely need a lower coverage amount than a farm that has a pumpkin patch and corn maze every fall with thousands of guests. Talking through the details of your operation with you insurance agent is a great way to determine the right coverage level and type of policy to obtain.
Identify dangerous conditions on the land and either provide warnings or make them safe.
Every state has slightly different laws related to when a landowner can be held liable for injuries. Most states group people into different categories and assign a certain level of duty to a landowner for each category. However, generally speaking, warning any guest on the property about dangerous conditions or making them safe would satisfy the duty of care owned by a landowner to any type of guest on the property. What are dangerous conditions? Well, whatever a court says they are. A deep hole covered with tree limbs, for example, could be considered a dangerous condition. A landowner can either warn people about potential dangers or make them self. There is no set requirement for how warnings may be given, but oftentimes if the landowner is entering into any type of lease or contract, identifying dangerous conditions in that type of document is useful.
Texas law divides people into three categories: (1) trespassers; (2) licensees; and (3) invitees. Landowners owe a different duty (level of responsibility) to each category. If the duty is met, the landowner is not liable. If not met, the landowner can be held liable to an injured party. Under Texas law, a landowner’s only duty to a trespasser–which is anyone on the land without permission–is not to intentionally injure them and not to act with gross negligence. [Read more here]. This is a very high bar for an injured party to prove in order to recover damages from a landowner. For a licensee–anyone on the property for their own benefit–the duty is a bit higher. In addition to not intentionally injuring or acting with gross negligence, the landowner must warn or make safe dangerous conditions known to the landowner that might not be obvious to the plaintiff. For an invitee–someone entering the property for the mutual benefit of themselves and the landowner–the duty is even higher. In addition to no intentional acts or gross negligence, and in addition to warning for known dangerous conditions, the landowner now has a duty to warn or make safe any dangerous condition of which he or she should have known with a reasonable inspection. For more info on the Texas approach to premises liability, click here.
Obtain written liability releases from anyone coming on the property.
Liability releases (also called liability waivers) are simply documents signed by guests agreeing that they will not hold a landowner liable for injuries that occur on the property. Again, laws differ by state, but generally speaking, courts will enforce this type of waiver if drafted in a manner comporting with the law of the state where the land is located. Releases usually identify the activity involved, list out common dangerous associated with that type of activity, state that the signor understands those risks, and agrees not to sue the landowner for negligence. Given the complex nature of these releases, and the importance of having one that is enforceable, it is recommended that a landowner seek the assistance of an attorney to draft a proper waiver. Spending the money up front to do so can certainly pay off in the long run if a lawsuit can be avoided.
In Texas, courts require releases to be conspicuous and to comply with the express negligence doctrine. This essentially means that the release cannot be hidden in the fine print of a larger document, like a hunting lease, and must contain language providing that the signor releases the landowner all claims of negligence or gross negligence related to the signor’s being on the property. [For more detail on these requirements, click here.]
Ensure that all limited liability statutes apply to the operation.
Many states have limited liability statutes protecting landowners from liability if certain conditions are met. Two of the most common types of statutes are an Agritourism Act or a Recreational Use Statute. Again, the details of these statutes differ by state, but they can offer important protections for landowners and generally are fairly easy and inexpensive to comply with. For example, the Texas Recreational Use Statute provides that a landowner is not liable except for intentional acts or gross negligence if the person injured was there for a recreational purpose and the landowner either charged no fee, did not charge more than a certain amount, or carried a sufficient level of insurance. Landowners should investigate the various statutes in their own state and ensure that they apply to their operation.
Both the Texas Recreational Use Statute and the Texas Agritourism Act provide important protections for owners of ag land in Texas. “Ag land” is defined under the Recreational Use Statute as land that is suitable for growing crops, forestry, or raising livestock and under the Agritourism Act as land suitable for growing crops and raising livestock. They offer limited liability to the landowner if a plaintiff is injured on the property while engaging in a recreational activity, including hunting, fishing, riding four-wheelers, and many more listed examples. Further, the Agritourism Act also applies to plaintiffs on the property for educational activities. Both have different requirements in order to apply, with the Recreational Use Statute requiring certain monetary requirements be met and the Agritourism Act requiring a sign be hung or certain release language signed. Additionally, Texas also has a Farm Animal Liability Act that protects farm animal owners from injuries caused by the inherent risks of farm animal activities. [Read more about these statutes here.]
Consider the use of a limited liability business entity structure.
Landowners may want to consider putting their business (or a particular part of the business) into a business entity that offers limited liability. This could include a limited liability company, limited partnership, or corporation. When formed correctly and handled property, these types of entities can provide limited liability for a landowner if an injury occurs on property owned by the entity. For example, if someone gets injured on property owned by an LLC of which Bob is a member, Bob would not be personally liable for the injuries. Conversely, if Bob owned the land in his own name, his personal assets could be subject to liability if an injury were to occur. There are a number of considerations that go into whether a business entity is right for an operation and, if so, which entity to select. Landowners should consult with an accountant and attorney in their area to help make the right decision for their operation. [For more information on selecting a business entity, listen to this prior podcast with Amber Miller.]