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  2. Standard 6: Financial Oversight
  3. E. Risk Management and Insurance

E. Risk Management and Insurance

  • Routinely assess and manage risks so that they do not jeopardize the land trust’s financial health and its ability to carry out its mission and legal responsibilities.
  • Carry general liability, directors’ and officers’ liability, property and other insurance, all as appropriate to the land trust’s risk exposure or as required by law.


Every land trust should regularly assess its risks and evaluate risk management options. This may involve inventorying potential hazards on and potential risks involved with uses of land trust properties, reviewing provincial liability and protective laws, setting up a procedure to document and review every injury or potential claim and decide what steps need to be taken to avoid similar events in the future, and other actions. However, the best risk assessment and management program, the best provincial recreational use statutes, and the best lawyers cannot prevent lawsuits. Thus, insurance (commercial general liability, non-owned automobile liability, property and owned assets, directors and officers, and other, as appropriate) is important for every land trust.

A risk assessment should also be conducted before a land trust considers mortgaging any of its property. In these situations, the land trust should carefully consider factors such as whether or not the land is subject to any restrictions designated by the donor or others, how the land trust’s supporters and the general public will perceive such an action, and whether it is consistent with or furthers the land trust’s mission.

A land trust, like any organization, is open to the threat of litigation and some land trusts have asked how adopting the Canadian Land Trust Standards and Practices will impact their risk of litigation. Following the guidelines contained within the Canadian Land Trust Standards and Practices could help reduce the land trust’s risk. If a land trust were involved in litigation, a court would be likely to look at the specifics of the issue at hand—for instance, if the land trust had the proper documentation or employed standard business procedures, or if the conservation agreement was, well-drafted and contained language related to estoppels and waiver of defences. If involved in litigation a land trust should always seek outside legal counsel to guide their actions.