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This spring, the Maryland General Assembly passed a new law affecting how certain "recreational facilities" can protect themselves from liability for injuries caused by their negligence or wrongful acts. Under the new law, Senate Bill 452 (SB 452), now part of Maryland’s Courts & Judicial Proceedings Article at § 5–401.2, except for very limited exceptions, any contract or agreement related to using a commercial “recreational facility” cannot limit or release the facility, its agents, or its on-duty employees from liability for injuries caused by their negligence or wrongful acts because such provisions are now considered to be against public policy and are void and unenforceable. Governor Moore signed the bill, and it takes effect in Maryland on October 1, 2024. Keep reading to learn more about what’s changed, who in the ag community might be affected by the change in the law, and what steps businesses can take now to reduce their risk of liability.
What’s Changed?
Broadly speaking, the new law removes protections that had been enjoyed by some businesses against claims of negligence. As we at ALEI often talk about, a common risk management practice (common across many types of businesses, not just agricultural operations) is to have people sign liability waivers when they are visiting your farm business. It’s customary for businesses to include a provision in a contract or agreement that limits the business’ liability, or releases the business from or indemnifies or holds the business harmless against liability for injury caused by or resulting from the negligence or other wrongful acts of the business or its agents or employees. In the waiver, customers or clients acknowledge the inherent dangers of whatever activity it is in which they are engaging, and waive their right to sue the business if they get hurt doing that activity. Prior to SB 452, waivers were generally valid and enforceable. Now, however, although waivers meant to release liability for gross negligence or criminal conduct have always been unenforceable in Maryland, SB 452 also makes waivers for injuries caused by the ordinary negligence of what the law refers to as “recreational facilities” unenforceable.
Who’s Affected?
The new law applies specifically to “recreational facilities.” That means that exculpatory clauses (a/k/a/ waivers) in agreements related to the use of what the law calls “recreational facilities” are no longer enforceable. A recreational facility is defined as “a commercial recreational facility,” “a commercial athletic facility,” or “an amusement attraction.” Under the new law, recreational facilities specifically include gymnasiums and swimming pools.
“Lodging establishments” that have at least four rooms available are specifically excluded from the definition of a recreational facility, unless they are available for use by the general public. State or local government units that lease land or facilities to a recreational facility are also excluded, and the law specifically exempts health club service agreements for services to be rendered for an adult.
What Will Be The Effect?
Businesses will likely continue having people sign waivers, but recreational facilities can no longer rely on them for defense in negligence cases. They will need to focus on proving they weren't negligent or that the plaintiff’s own negligence contributed to the injury. Some facilities might argue that they don't fall under the "recreational facility" definition to avoid the law's restrictions. Additionally, businesses such as horse riding and some agritourism facilities might see higher liability insurance premiums due to increased lawsuit risks.
What Can Businesses Do Now To Reduce Their Liability Risk?
It’s important to consult with your attorney to review your operations and adjust waivers and contracts accordingly. Enhancing safety measures on your property, such as employee training, proper signage, facility repairs, and safe storage of hazardous substances, can also help reduce liability risks. Discuss potential insurance changes with your agent to ensure adequate coverage. And, if you are part of an industry advocacy organization (e.g., Farm Bureau), make them aware of the change and utilize any resources they can provide (e.g., discounts on insurance, signage). Also, check with county Extension agents or other trusted ag professionals for information on grants or loans for safety improvements.
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