I serve on the board of my local saddle club, which owns a property used for horse shows, clinics, and general riding. Some events are managed by our club, but in some cases we lease the facilities out to 4-H groups and other equestrian clubs. As board members, are we liable in the event someone is injured on the club’s property or at club events?

AThe simple answer to this question depends on whether your saddle club is properly incorporated as a corporation, a limited liability company (LLC), or partnership. (For more information about legal business entities, see the U.S. Small Business Administration website.

If your saddle club’s leadership has properly formed it as a business entity, such as a corporation or LLC, you as a board member are generally protected from personal liability. If your saddle club hasn’t been properly formed as a separate business entity, you remain at risk of personal liability. You only have personal liability protection if someone has taken the necessary steps to incorporate the club (i.e., articles of incorporation, business filings with the state, etc.). I make this distinction because, if your club operates like a separate business entity but is actually an informal and unincorporated club, you could be personally liable. This is especially important to note because informal organizations structured like corporations but not officially incorporated are common in the horse industry; these clubs don’t offer their board members or membership protection from personal liability.

Where you to have a properly formed corporate entity, and someone suffers an injury, a court might issue a judgment against the entity (in this case, your saddle club), but only the entity is financially liable. Thanks to its corporate status, the club’s directors, officers, and members are not personally responsible for paying that debt. By contrast, if an unincorporated association of horsemen/women owned the premises, the courts could require the unincorporated group’s individual directors/members to pay the judgment amount out of their own pockets, thus putting personal assets at risk