Q: I have a beautiful four-stall barn, an outdoor ring, and several spacious paddocks at my home where I’ve kept my two horses for the past few years. I would l love to make a little extra income by boarding an additional horse or two. Plus, I’d appreciate having someone to ride with. What are some legal considerations I need to keep in mind before I begin to offer boarding services?
A: Boarding horses is not something that should be taken lightly and requires a good deal of planning. Even though you have the potential to earn a bit of extra income on the side, it is still considered operating a business, and appropriate measures should be taken before you begin this venture.
Here are five necessities you should make sure you have in place before you begin boarding.
1. Adequate Insurance
If something were to happen to one of your boarders while they are riding at your farm, you likely will not have adequate insurance coverage through your homeowner or property insurance policy. If you're accepting compensation of any kind (even if it’s just reimbursement for feed or hay), your homeowner's insurance will probably consider this a commercial use of your property. Most homeowner's insurance policies will not cover commercial use. So, prior to accepting boarders, you’ll need to look into your commercial liability insurance options and purchase the appropriate coverage or policy endorsement. There are several good insurance companies that specialize in equine, owner, and trainer insurance.
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2. Liability Release
A liability release is a must if you have people boarding and riding on your farm. The liability release should be signed by anyone engaging in equine activity on your property, including your future boarders and any of their friends and family members who come to your farm. Depending on your state, Equine Activity Liability Act warning signs may also need to be posted on your property. You should also be aware that liability releases and proper liability signage are not a substitute for liability insurance.
3. Boarding Contract
A solid boarding contract is essential and should include, at a minimum, the description of the horse(s), fees and terms, the appropriate Equine Activity Liability Act verbiage, a hold harmless clause (a statement in a legal contract that absolves one or both parties in a contract of legal liability for any injuries or damage suffered by the party signing the contract), and a right of lien. Almost all states provide for a stablemen’s lien (also known as an agister’s lien), which allows for a barn owner to recoup unpaid bills by asserting a lien on the animal being boarded. It is important to review the stablemen’s lien in your state because the statutes differ widely in terms of the procedures that must be followed. It also may be wise to consult with an attorney before undertaking to assert a lien to discuss all options and to ensure compliance with the statutory language.
Not only should the boarding contract have a description of the horse, including identifying characteristics and name, but it should also list emergency contacts including veterinarian and farrier authorization for emergency care and equine insurance information. The contract should also state how much notice is required to terminate the arrangement.
A well-written contract can go a long way in helping to set expectations for the boarder, as well as protecting you should the boarder break the agreement, not pay, or present a liability. Make sure all parties sign, date, and receive fully executed copies.
4. Barn Rules
It is important to post barn rules and provide each new boarder with a copy. This should cover the rules for boarders to follow at your barn. It should include rules about dogs on the property, the necessity of wearing a helmet and proper shoes when riding, inherent assumption of risk with equine activities (redundancy is good), and other rules important for your barn to operate safely.
5. Limiting Personal Liability
You may also want to discuss with your lawyer whether you should set up an LLC or a corporation for your boarding venture. Using a limited liability company can help further protect your personal assets from any lawsuit.
After considering the recommended checklist identified above and taking into account the extra cost and effort involved, are you still prepared to tackle this new venture? If so, you can begin to board horses knowing that you have taken some reasonable measures to protect your interests should issues arise.
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Photos by Jump Media.