Download - Haunted Attraction Legal Issues
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Haunted Attraction Law
Brett HaysDirector – Fear FairAttorney – Hays Law OfficeAssociation Attorney - Haunted Attraction Association
Brett Hays
@fearfair
fearfair
fearfair
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Biography• Practicing Attorney since 1994• Director/Founder Fear Fair since 2001• Board Member/Counsel HAA• Background in:
• Personal Injury / Products Liability• Criminal Defense• Business Law• Family Law
• Practice now is mostly Criminal Defense / Family Law
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Home HaunterIssues
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Liability Concerns• Homeowners Insurance Covers You!
• Benefits• Will provide defense counsel• Usually $100,000 coverage• Check your policy!!
• Dangers!• If you charge admission lose coverage• Taking donations can count as charging• Consider a special policy• Surprisingly affordable• eventhelper.com
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ProfessionalHaunted AttractionIssues
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Choosing Your Business Form
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Sole Proprietorship• Simplest Form is Sole Proprietorship
• Pros• Easy to start, end• Maintain total control• All profits flow straight to owner
• Cons• Liability, Liability, Liability• Difficult to raise funds• Some expenses not deductible
• Eg your insurance premiums• Difficult to add partners, investors
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Partnership• Easiest Multiple Owner form is Partnership
• Pros• Relatively Easy to Establish
• Don’t neglect your agreement!!• Profits flow straight through• Increased talent / resources
• Cons• Liability x2, Liability x3, Liability x4… • If one partners leaves or dies, ends• Some expenses not deductible
• Eg your insurance premiums
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General Partnership• Divide responsibility and liability per
agreement• Equal shares assumed• Creditors may not care about your
agreement
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Limited Partnership• Most partners have limited liability
• To extent of their investment• Most partners have limited input• More complex and formal than general
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Joint Venture• Limited period of time or single project
• For example, one season• If you keep operating IRS will consider you
to be a general partnership• Have to file that way• Have to wind-up and distribute assets
that way
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Partnership Agreement• How decisions will be made• How profits/losses will be divided• How disputes will be resolved• How future partners may come in• How partners can be bought out• How business will end
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Corporations• It’s own entity• Can make contracts, be sued
• Pros• Liability Protection!!• Survives ownership changes• Only liable up to your investment
• Cons• Little more complicated to form• Monitored by state/feds paperwork• Dividends cannot be deducted, so may
be taxed twice
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A Note On Liability• Protection is not absolute!
• Payroll taxes for example• You can blow it!
• Piercing the corporate veil• Do not commingle assets
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Subchapter S or C• Just a tax election
• Allows taxes to be treated as partnership or sole proprietorship
• There are limits• Should only pay yourself what it would
cost to replace yourself• If not IRS can reclassify as wages and
you will owe payroll taxes
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Limited Liability Company• Liability Protections of a Corporation• Tax efficiencies and ease of a partnership
• Pick any two• Limited liability to extent of assets• Continuity of life• Centralization of management• Free transferability of ownership
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LIABILITY ISSUES
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Areas of Liability• Employees / Volunteers• Patrons• Premises Liability
• Not just haunt season
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Insurance• Do you own the building?• Do you have volunteers/employees/both?• Will you be open only in the fall?• Don’t neglect to try your local agent?• Do you have vehicles for the haunt?• Most event insurance specifically excludes
volunteers and is only good during operating hours – and your general insurance excludes the haunt… big dangerous gap you need to fill!
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Insurance• Understand your coverage!• General Aggregate Per Event
• That’s all there is, there ain’t no more• Get as much as you can afford
• Products & Completed Operations, Aggregate• Claims from some defect – eg props,
electrical• Personal Injury Aggregate
• Also covers slander, libel, false arrest
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Insurance• Each Occurrence
• Per incident or occurrence not person injured
• Damages to Premises Rented• Exceptions to exclusions
• Only if rented for 7 or fewer consecutive days if legally obligated to pay for damage – (excludes fire)
• Separate coverage for fire• Must be liable due to tort not by
agreement
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Insurance• Medical Payments
• Payable without regard to fault• Limit applies to each person• Subject to aggregate, occurrence limits
• Deductible• Deductible is per event not aggregate• Make sure it’s not too high
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Limiting Your Liability• Waivers
• Both for volunteers and patrons• Better to have them than not• Will hold up to an extent• Good in general that they were put on
notice of risk• Have a written policy / get it signed
• Post your warnings and rules!!• Make sure staff understands importance of
the rules and make repercussions consistent and swift
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Your Cast and Crew
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Volunteers• What can you legally give them
• Food• Only on premises
• Lodging• Maybe at conventions?
• Scholarships• Can include training\
• Mileage – 55.5 cents for 2012• Probably can give up to $599
• See 29 CFR 553.106(e)
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Independent Contractors• Risky
• Probably cannot get away with it• Determined by:
• Behavioral control• When, how, where to do work• What tools or equipment to use
• Training – shows want done your way
• Opportunity for profit or losses
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Thanks for coming!Any Questions?
Brett Hays
@fearfair
fearfair
fearfair