Final answer:
To protect themselves from liability due to negligence, John and Joan would need liability insurance, which covers legal and damage costs. Clearly defined property rights, as discussed by Coase, are essential for determining legal responsibility for businesses like John and Joan's corn maze.
Step-by-step explanation:
To protect John and Joan if someone is injured in their corn maze due to their negligence, they would need liability insurance.
This type of coverage is designed to provide protection for business owners in the event that they are found legally responsible for personal injuries sustained by visitors on their property.
It covers legal costs and any damages awarded, up to the policy limits. Liability insurance is crucial for businesses that regularly open their property to the public, as it offers peace of mind and financial security.
In applying the insights from Coase's theorem, which discusses the importance of clearly defined property rights, such insurance also effectively internalizes the potential external costs of running such a business.
By having liability insurance, John and Joan are recognizing their legal responsibility to provide a safe environment for their visitors and the financial implications of failing to do so.