Economic times are tough and horse ownership is expensive.  In recent years it has become more common for people to try to defray the cost of horse ownership by using their horses to earn some money on the side. Maybe it’s a young college student who decides to offer horse-drawn wagon rides on his family farm on weekends; or perhaps an older individual with time on her hands provides equine grooming services; or maybe a person finds himself with extra barn space and decides to rent it out. Whatever the circumstances and no matter the scope, any person who accepts money for an equine-related activity may find themselves labeled by law as an “equine professional.”

While the details may vary, most states have statutes which define an equine professional as any person who is engaged in any equine-related activity for compensation, whether it is on a part-time or full-time basis. Equine-related activities can include instructing riders, renting horses for riding purposes (including buggy or wagon rides), renting barn space, renting equipment or tack to riders, grooming services, training services, and even horse-sitting services.

At this point, you may be wondering what difference it makes. What is the big deal if the law considers someone an “equine professional?”  The fact is, there are a whole host of legal implications to consider once you are labeled as an equine professional, and most of them center around your responsibilities and liabilities to those paying for your services. If someone is injured while partaking in the services you offer, or if damage occurs to property (including the horse), you need to be aware of your potential exposure from a legal standpoint.

First and foremost, equine professionals should always be covered by insurance. Many equine professionals make the mistake of thinking that, since most states have adopted some form of Equine Activity Liability Statute, they are protected from liability and don’t need to carry insurance. However, such statutes are not “zero liability” statutes. These statutes were designed to encourage equine activity by limiting the ability of those harmed at equine events or activities to sue those who organize and sponsor such events. But these EAL Statutes do not offer complete immunity from suit, and there are many exceptions that apply, through which an individual might still be sued. In addition, most of these statutes carry a number of requirements that must be followed in order for the person claiming protection under the statute to qualify. For instance, most contain specific requirements for warnings and signage to be posted on the premises. The details and requirements differ from state to state and, consequently, it is important for any person who might be considered an equine professional to familiarize themselves with their rights and obligations under their particular state’s statute.

In addition, many horse owners are under the mistaken assumption that their homeowner’s insurance policy will cover them for any horse-related mishaps that occur on their property.  However, most homeowner’s policies have specific exclusions for claims arising from a business- or profession-related activity.  If you are considered an “equine professional” by the law, therefore, your homeowner’s policy will likely not afford coverage for damages arising from the specific equine-related activity.

In light of these facts, it is important for any person who falls within the definition of equine professional to have proper insurance in place. This could include:

• Commercial General Liability Coverage
• Equine Professional Liability Insurance
• Incidental Business Endorsement coverage.

Of course this additional coverage can be costly, but in the long run is for your own protection. Which coverage is right for you will depend on your particular circumstances, and you should discuss the options with an insurance professional.

In addition to insurance, any person who may be considered an equine professional should further protect themselves by having appropriate contracts in place. No equine activity for which you expect to receive payment should ever be done on a handshake. For most equine activities, it is important to have at least a Liability Release in place.  A Liability Release should indicate, in no uncertain terms, that the person who is participating in the equine activity accepts responsibility for any injury or damage that occurs.  While a Liability Release, no matter how well drafted, will never offer complete protection against a potential lawsuit, it may at least lessen the chances that you will be sued and perhaps improve your chances if you are brought to court.

For those who are considering renting equine space, there should be a detailed lease agreement and/or boarding contract in place. The document should spell out the details of the lease or boarding arrangement and indicate the rights and obligations of both lessee and lessor, including who bears the responsibility in case of injury or damage.

There is really no such thing as a lease or boarding agreement that contains too much detail. Rather, most cases end up in litigation because there wasn’t enough detail in the contract.

A “form” contract, such as the ones you might find on the Internet, are a good place to start, but your contract should be modified so that it is specific to your circumstances.

In addition to liability and contractual concerns, any person who wants to start any type of equine business, large or small, should make sure they are in compliance with local rules and regulations.

Depending upon the type of activity you have in mind, many counties and local municipalities have rules that will impact how you proceed. For instance, if you want to rent out barn space, you might discover that your township now considers your barn to be a “business,” but your area is not zoned for commercial businesses.

This could result in hefty fines and other penalties. Similarly, if you decide to offer trail rides on the weekends, your municipality might accept the arrangement as a business, but may require that you comply with local business regulations requiring handicap access, proper signage, and so forth. Therefore, it is important to check with your local government to find out what rules and regulations might apply to your particular equine activity.

In sum, what you may consider as “just a hobby” can unintentionally become a “business venture” the minute you start accepting compensation. You don’t have to make a lot of money to earn a lot of liability. It is important to consider the legal implications of being labeled an “equine professional,” or the couple of extra bucks you had hoped to raise might turn into more than you bargained for.

Mati Jarve is the managing partner of the Marlton, New Jersey law firm of Jarve Kaplan Granato, LLC. He is certified by the New Jersey Supreme Court as a Civil Trial Attorney and the National Board of Trial Attorneys as a Trial Advocate. Licensed in New Jersey, Pennsylvania and Arizona, he maintains a national practice in civil litigation, including equine related issues. This article is for informational purposes only and is not intended to be legal advice.

If you have a specific legal question or problem, you should consult with an experienced and knowledgeable equine law attorney. Questions, comments or suggestions can be e-mailed to mjarve@nj-triallawyers.com, by visiting www.nj-triallawyers.com.