The Land Trust Alliance created Terrafirma as a charitable risk pool owned exclusively by participating land trusts that insures its members against the legal costs of defending conservation. It is available for all Land Trust Alliance member land trusts with conservation easements or fee lands held for conservation. Terrafirma also provides information and training on risk management to the members. Terrafirma is part of the Land Trust Alliance’s national strategy to build a formidable defense in ensuring conservation permanence and was designed in consultation with insurance specialists, attorneys, and land trusts across America. This is the flagship resource to permanently protect conserved lands, and it marks the first time that a conservation group has created a captive insurance service. For more answers to frequently asked questions on applications, costs, claims, governance, and more, please see the INFO page.
Terrafirma is owned and managed by the participating land trusts. Since it was designed by and for land trusts, coverage meets their specifications. The Members Committee represents the owner member land trusts of Terrafirma Risk Retention Group LLC and is responsible for approving its policies and strategic direction. A Claims Committee comprised of outside experts and land trusts representatives oversees claims management in collaboration with the insured land trusts, which means land trust leaders are in the driver's seat when it comes to determining how to manage a case. Terrafirma is licensed as a captive insurance risk retention group by the State of Vermont, License #965.
Land trusts have no way of knowing when they will need to litigate to protect an easement or conserved property, how long litigation may take or how much it may cost. Terrafirma minimizes this risk and uncertainty by reducing a land trust's exposure to potentially high litigation fees. Terrafirma sends a clear signal that a land trust has the capacity to defend its easements and conserved lands, and coverage provides participating land trusts with access to a national team of experts.
Terrafirma is a creative response to a big national problem. In the late 1990s, Colorado Open Lands staff started asking a question that ultimately led to the creation of a new tool to help land trusts to protect their conserved lands forever. How, they wondered, would they handle enforcement actions on their easements?
"It wasn’t any particular problem we ran into," recalls Dan Pike, with Colorado Open Lands. "We just started asking what we would do if we ever had to go to court on our easements. And honestly, we didn’t have a good answer." Contributing to the sense of urgency was a well-publicized case in which the French and Pickering Conservation Trust had incurred $125,000 in legal fees defending an easement.
"It was scary," said Pike of the French and Pickering case. "Those numbers just shocked everybody."
Pike asked Jessica Jay, a first-year associate at a Denver law firm, to research easement enforcement options. "I went into it looking for a silver bullet," recalls Jay. "And I came back to Dan with 18 options, half of which involved insurance."
While Pike was less interested in insurance for Colorado Open Lands, Jay was captivated by the larger possibilities. "I realized that if land trusts approached the issue as a community, we'd have a critical mass to create our own insurance—something that worked for land trusts and their unique needs."
Jay's report, published in 1999, made the rounds of the land trust community and captured the attention of Darla Guenzler with the Bay Area Open Space Council (now Executive Director of the California Council of Land Trusts). Guenzler launched an analysis of the scale and scope of enforcement activities across the country. Meanwhile, the Heart of the Rockies—comprised of land trusts in Montana, Wyoming and Idaho—asked attorney Andy Dana to explore the feasibility of insurance models for land trusts. Dana's analysis indicated that pooled insurance for land trusts could be a viable option—but only at a larger scale. That's when the Land Trust Alliance stepped in.
"Land trust leaders had been talking about some form of collective defense for over 20 years," recalls Leslie Ratley-Beach with the Land Trust Alliance. "But it wasn’t until the western groups started really looking into things that a tangible solution emerged."
Terrafirma is another step the land trust community took to keep our promises to everyone in America. Regulators, contributors, members, and the public can be more confident than ever that land trusts take permanence seriously and have the capacity and capability to uphold conservation forever.
Expensive and unpredictable costs of litigation, even if rare, can be devastating when they occur, so it makes sense to have a collective fund and nationwide experts to call on for help. An expensive lawsuit and worse, a multiple-case scenario, poses great risks to land trusts, and by extension, to land conservation. Terrafirma is uniting land trusts across America to share the defense of legal challenges. Terrafirma provides a safety net for legal expenses so that land trusts have the confidence and capability to uphold conservation in perpetuity. This will help to create favorable case law, avoid unfavorable case law, and protect the permanence of conserved land.
Terrafirma provides early, effective, and expert assistance to minimize disputes and shares integrated tools and training on best practices to help prevent future claims. The service is guided by a philosophy of providing the broadest possible coverage for the greatest number of land trusts, consistent with prudent business principles. Terrafirma is designed to help land trusts protect their reserves and their integrity from legal challenges. It is an additional safety net, not a substitute for sufficient reserves and sound practices. Land trusts could think of Terrafirma as standing behind them to protect their resources from catastrophic legal expenses and to help them avoid unnecessary litigation through solid practices, early dispute resolution, and smart risk management.
Thank you to the pioneers who opened a door through important research, setting the stage for the conservation defense insurance service:
Very special thanks to the attorneys and staff at the law firm of Sullivan & Cromwell LLP who volunteered hundreds of hours of time accelerating the launch of Terrafirma by creating a solid legal organization. We also are indebted to the generous support of the foundations that funded the capitalization of Terrafirma: