Insurance protects horse owners and users against negligence and liability.
A good insurance policy is needed for any horse business to protect from the cost of defending itself in court and to protect from lawsuits. Before purchasing an insurance policy on your horse operation, the following should be considered and be reevaluated each year to determine the value of the policy and what possible risks are to be anticipated:
- Financial stability of business
- Value of the horses
- Level of risk
- Level of personal involvement
- Likelihood of experiencing a covered loss while insured
Equine insurance should protect:
- Farm owners
- Horse owners
- Tenants leasing the property
- Property owners
- Race horses
Types of Policies and Coverage
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General Liability Insurance
- Most important type of insurance for a horse business
- Protects insured against bodily injury/accident and property damage suits
- Investigation and court costs are included in insurance protection
- Important to list all activities and location of activities the horses/riders participate in, in order to be covered
- Covers the insured anywhere in the United States for only activities listed
- Facility and animal determine the value of the policy
- Example: The more assets, the more liability insurance needed
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Personal Horse Owners Liability Coverage
- Coverage for bodily injury or property damage to third parties caused by your personally owned horse, when used for non-commercial purposes
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Equine Professional Liability Coverage
- For claims and defense fees resulting from an negligent act, error, or omission arising from your professional equestrian activity
- Example: A trainer who rents facilities
- For claims and defense fees resulting from an negligent act, error, or omission arising from your professional equestrian activity
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Independent Horse Shows and Events
- Liability coverage for single horse shows, clinics, and equestrian events
- Provided for the actual event day(s) and includes both the setup and take down
-
Riding Clubs and Associations
- Liability coverage for member organizations and their public event days
- Coverage is up to seven public event days during the year with coverage for additional days available
-
Property and Commercial Auto
- Additional insurance for fire, lightning, wind, and theft
- Helps cover vehicles, buildings, machinery, tack, etc.
- Can be packaged with liability insurance policies
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Must declare a list of major items and value
- Example: A barn might be covered, but if the tractor, horses, etc. were not listed, they won’t be covered
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Care, Custody, Control (CCC)
- Protects insured if an owner of a horse sues due to death/harm of that horse
- This is not covered by most liability insurance policies
- In some cases, this will help cover vet bills and/or value of horse
- A dollar value must be assigned to each horse to receive coverage
- This will not cover stolen horses
- Policy limits on a per horse/year basis
-
Mortality
- Usually covers life of a horse
- Premiums based on breed, bloodlines, age, use
- Most companies require a certificate of health from the vet. Only healthy animals are covered
- Approval will be needed for:
- Non-emergency surgery, castration, non-emergency euthanasia, nerving
- Medication can be given under the supervision of a vet only
- Agreed Value:
- The set amount determined when purchasing the policy. This is what you are given should the animal die.
- Actual Cash Value:
- The set amount determined when purchasing and when filing a claim, but the fair market value will be received instead of the set value.
-
Loss of Use
- This is added coverage to mortality policy or can be offered as a separate coverage
- This is expensive, because the insurance company is basically buying the horse
- The horse must be totally disabled to receive coverage
- On average, 60% of the value of the animal is covered
- This is good insurance for high-level performance horses, not pets
- Very expensive, and has a premium
-
Major Medical
- Covers surgical and non-surgical procedures:
- Diagnostic tests
- Non-surgical illnesses
- 35% of surgery related X-rays, hospitalization, lab tests, and medications
- This is similar to health insurance for humans, and requires a deductible
- Usually has a $5,000 claim limit and an annual premium
- Covers surgical and non-surgical procedures:
-
Worker’s Compensation
- Employer must pay for medical expenses and lost wages when an employee sustains a work-related injury
- Employer must also be covered by this type of insurance
- Normally inexpensive
- States differ with policy regulations
-
Umbrella Liability Coverage
- Offer higher limits and policies
- Can add up to $5,000,000 in additional coverage
Types of Insurance Carriers
-
Admitted Insurers
- Have state-approved rates
- Guarantee Fund to cover clients until they can get new insurance
-
Excess and Surplus Lines Insurers
- Cover higher-risk clients
- Rodeos, polo, vaulting, etc.
- Cover higher-risk clients
Insurance Representatives
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Brokers
- Sell insurance products from several different companies
- Not employed by a single firm
-
Agents
- Work for a single firm
- Only deal with insurance products from a single company
Things to remember:
- Make sure all activities are disclosed and covered.
- Establish a positive working relationship with your agent.
- Make sure coverage is adequate and updated periodically.
Additional Resources:
http://ncrcrd.msu.edu
Equine Insurance: Risk Management
What Coverage Should I Get When Transporting My Horse Video
Liability and the Landowner Video
Funded in part by the North Central Regional Center for Rural Development (NCRCRD)
Photo By: Katherine Mustafa Photography
Photo By: pixabay.com
Photo By: pixabay.com
