BISMARCK, N.D. (AP)--After 16 years of putting people atop horses and being responsible for their safety, Wally Owens was ready to start singing "Happy Trails."

Owens, who ran a trail ride operation in the North Dakota Badlands, got out of the business about four years ago when he became disillusioned with litigious customers and costly insurance.

"I do miss it, but it was getting tougher and tougher," said Owens, who now manages a state park. "I'd never do it again."

North Dakota's nature tourism industry has huge potential but also faces big roadblocks, primarily involving liability insurance, industry officials say.

"A lot of insurance companies out there don't have a lot of experience with businesses of this type," said Marty Anderson, who operates a video production business in Minot.

Anderson is the chairman of a new group--the North Dakota Nature and Rural Tourism Association--that hopes to build the industry.

"There are a number of groups out there dealing with tourism and nature tourism in their own rural areas. This is an effort to be an umbrella group," Anderson said. "Our vision for all of this is to have all the regional and local groups work on the issues and concerns they have for their immediate area, and the statewide group will tackle some of the larger issues."

They include insurance and cooperative marketing for businesses that range from country bed-and-breakfasts and trail ride operations to hunting clubs and canoeing outfits.

Owens said liability insurance ate up as much as 30 percent of the revenue from his trail ride business. BirdWoman Missouri River Adventures, a canoeing enterprise near Washburn, has had better luck, finding insurance with a premium of less than 10 percent of the outfit's revenue.

Still, "It's not cheap," said Jim Kaiser, who helps his wife, Kathy, with the summer business.

"Because it's part of the cost of doing business, you have to factor that into your prices," he said. "Sometimes people locally struggle with the prices we charge, but tourists don't seem to bat an eye."

Frivolous lawsuits are one reason for the costly premiums, said Owens, a former president of the National Association of Pack and Trail Operators. One customer who filed a claim against his business ended up with a $10,000 settlement because his insurer thought it was cheaper than paying an attorney to fight the claim, he said.

"People think they can get $2,000, $5,000 just by writing a letter," Owens said.

The fact that many nature-based tourism businesses expose people to physical risk also is a factor in insurance costs, said Larry Maslowski, an analyst with the state Insurance Department.

Activities such as hunting, horse riding and mountain biking "are not considered to be your normal, mainstream type of activities," he said.

The relatively small number of nature-based tourism businesses also is a challenge for insurers, Maslowski said.

"If you're only talking about, say, 25 of these things--it's a problem trying to set a rate for that class because of its size and the risks involved," he said. "Any insurance company is going to want to look at a spread of risk."

Tracy Potter, executive director of the Fort Abraham Lincoln Foundation, is on a task force seeking solutions to high-cost insurance. The foundation, which operates a trail ride, is paying one-third of its revenue in premiums, though it never has had an accident, he said.

"It is a serious problem that is becoming more serious," Potter said. "It could not only inhibit the growth of the industry in the state but could lead to the abandonment of businesses, which is something none of us want to see."

Larry Leistritz, a North Dakota State University researcher who is studying the economic potential of nature-based tourism in the state, said more than half of the 200 businesses that responded to a survey said liability insurance is "prohibitively expensive."

Insurance has been an issue "in every single case that we've worked with just because they're not traditional," said Paul Wellman, a coordinator with a Grafton-based regional development council and one of the forces behind the new association.

"It probably is something that needs to be discussed at the state level," he said.

Potter said possible solutions include limits on liability for horse operations, or an industry insurance fund similar to the North Dakota Insurance Reserve Fund. That fund provides coverage for about 2,500 political bodies in the state.

"That's what's allowed us to have city parks, playgrounds," Potter said. "That model may be what we need in the tourism business."

The industry also would benefit from cooperative marketing, something the new association also hopes to accomplish, possibly through a Web site, Anderson said. More than two-thirds of the businesses that responded to Leistritz's survey said help with marketing would benefit their business.

Wellman said another possibility is travel packages that incorporate several businesses and offer tourists a range of activities in one trip.

"I'm really excited about the possibilities that this group could provide," Wellman said of the new association. "There's a need for support because (nature-based tourism) is something new.

"Everybody is used to local farmers having raised Wheat and sunflowers and potatoes and beef cattle for a hundred years," he said. "This is a new way of utilizing those resources. I think the local people need all the help they can get to make it work."

The association has finalized its bylaws and set its dues, Anderson said. It will begin soliciting members this spring and set up a board of directors by fall, he said.

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