How can landowners protect themselves from liability?

In fact, in one morning this past month, I got three emails from landowners asking how they can protect themselves in the event an injury does occur on their land.

Tiffany Lashmet

Associate Professor & Specialist / Texas A&M University AgriLife Extension

Email Tiffany Lashmet

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.

1. 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 such as a roadside fruit stand or guided hunts, the landowner should confirm the farm and ranch policy’s provisions cover the additional activities.

How much insurance should a landowner carry? Well, in typical attorney fashion, I’ll say 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 your insurance agent is a great way to determine the right coverage level and type of policy to obtain.

2. 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 owed 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 safe. 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.

3. Obtain written liability releases from anyone coming on the property

Liability releases (also called liability waivers) are simply documents signed by guests agreeing 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 dangers associated with that type of activity, and state 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 a landowner seek the assistance of an attorney to draft a proper waiver. Spending the money upfront to do so can certainly pay off in the long run if a lawsuit can be avoided.

4. Ensure 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 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 they apply to their operation.

5. 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 properly, 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.