# Trail Building as a Business: How Liable is the trail builder?



## sambs827 (Dec 8, 2008)

As I explore my most-college options one idea that occurs to me is creating (on paper at least) a trail design & construction business. There's talk of getting some grant money from Bikes Belong this summer for what we're doing in my town and after spending money on some other things (shared roadway signs, trail markings, pamphlets with trail maps and road bike routes) there should be some money to pay for trail building. 

It occurred to me that the work I've been doing (and could ultimately get this grant money for) might have a greater legitimacy if it was being conducted by a business, not just some Joe Schmoe out in the woods. That being said, would it be for some Litigious Larry to come after me if my name/business name was somehow attached to the creation of this trail on public property? Is it safer to remain the mysterious trail gnome in this case? All of these trails are being developed with the permission of the land manager.

Thoughts of this grant aside, what are the disadvantages of creating (again, at least on paper) my own trail building company? This isn't a case of my pouring everything into this endeavor, but would instead be a way to legitimize myself and maybe score a job here and there on the side. Any feedback from you older and wiser folks would be truly appreciated.

-Sam


----------



## Cotharyus (Jun 21, 2012)

The IMBA books Trail Solutions and Managing Mountain Biking both have good information on Risk Management (that's cap'd for a reason) and liability of builders, owners, etc. along with different case examples to back up what they're talking about (that last part is only in Managing Mountain Biking though). It's worth a read to understand what you might be liable for, and how to mitigate that liability (Risk Management) through best practice.


----------



## smeets1 (Dec 30, 2003)

Operating as a legal entity is preferable since generally speaking, it will shield you from personal liability for acts of the trail building company. Assume a trail builder is held liable for an injury and a judgment is entered against the trail builder in the amount of $100. If the trail builder operates in her individual capacity, then she is personally obligated to pay the $100. If our trail builder operates as a legal entity, then the entity and not the individual is responsible for the $100. In the first scenario the trail builder may need to sell her car and tap into her savings account in order to pay the $100, whereas in the second scenario her personal assets are not at risk. In either case the trail builder will need to insure against the potential liability.

If you decide to pursue trail building, then you should consult with a lawyer in your area to determine if there are any specific licensing requirements for trail builders (e.g., landscape architects) and to assist in drafting an operating agreement or bylaws, especially if you will have business partners.


----------



## HypNoTic (Jan 30, 2007)

Contact a PTBA member in your area to understand how a trailbuilding business works and what you should be aware of. It goes way beyond trailbuilding liability. Permitting/licensing is another aspect. 

Just to say, my insurance fees are high enough that I could buy a small car with that amount!


----------



## cmc4130 (Jan 30, 2008)

Sometimes company owners are held personally liable even when they have a corporate entity. An individual "doing business as" a corporate entity has to be very careful to follow the formalities/protocols both on the legal side and the accounting side.

Piercing the corporate veil - Wikipedia, the free encyclopedia


----------



## smeets1 (Dec 30, 2003)

Agreed, thus the "generally speaking" qualification. That being said, if corporate formalities are observed it is very difficult to pierce the corporate veil.


----------



## dburatti (Feb 14, 2004)

What kind of legal entity you form has a bearing on how you can be treated as a litigant, e.g. a limited liability company, a partnership, an S-Corp, a C-Corp, etc. I was a sole proprietor LLC with a $1M general liability insurance policy and sometimes also bonded the work I performed. I felt adequately covered in the event that my company was sued and the suit actually went to court.

Your school might have an office of law students who can offer free coaching about your situation.

D


----------



## Digital (Jun 24, 2005)

Excellent thread, great advise! Hopefully the O.P. carries through with his plan to create a legit' trail-building company - more trails 
= more happy people on properly designed, sustainable trails.

Purchase or inter-library-loan a copy of Effective Leadership in Adventure Programming. It features a comprehensive chapter on liability that is second to none in providing details on what you will want to do in 'covering your but'.

Andrew Drouin
South Okanagan Trail Alliance - SOTA


----------



## dmonbike (Jun 26, 2006)

One thing you should look out for is, depending on who gets the money for the trail to be constructed, if you are a company, you may have to bid to get the work. Most cities will not sole source work like this. That being said, dburatti is correct about the entity you form affecting it. Also, you will have to be insured. A local PTBA member could help with this, and you might learn some things from them. Good luck!


----------



## Jasonoutside313 (Dec 6, 2013)

Great advice from all. One thing to take into account is that most Public land agencies require Licencing at a minimum and additionally bonding for construction projects. Liability is Covered extensively within the PBTA, and I would advice that a maintenance schedule be provided upon trail or feature construction. This could assist with xfering liability to the trail owner at the end of the project. Land managers are looking for engineering specs etc.


----------

