Insure Your Horse for Liability

horse liability insurance

One great concern for an owner is the potential for their horse to cause injury or property damage to someone else (a third party). They fear they may be sued, need to hire an attorney to defend them, and have a claim made against them for money damages that could harm their financial security.  These circumstances pose financial threat to every horse owner, and are a valid concern because horses are large prey animals with wandering and herding instincts; therefore even the best trained ones can have somewhat unpredictable behaviors. Horses are not vicious by nature, but they become frightened at times. When a horse feels threatened, common reactions to lift the head abruptly, run away, jump sideways or forward, rear, kick, buck, or bite can cause problems for humans. Most incidents are minor, but some are serious.  If you board your horse and leave its care to someone else, if you take or use your horse away from your premises to show or trail ride, or if you allow someone to pet, lead, or ride the horse, you have greater potential for serious third party injury. Incidents can occur at or away from your premises if your horse gets away from you or out of its fenced enclosure. Children and adults are often fascinated with horses and may trespass onto your property when you are not watching and become injured when they try to pet, feed or ride your horses without your permission or supervision. As a horse owner, it is in your best interest to be sure your horses and horse activities are insured for liability. Fortunately, some of the worry of horse ownership can be relieved when you buy a Horse Owner Liability Policy. Liability insurance will protect you from financial loss should your horse cause BODILY INJURY or PROPERTY DAMAGE to an outsider (a third party) and they make a claim or file a law suit against you for damages.

Personal vs. Commercial Horse Ownership:

If your horses are not used commercially, your “exposure” is considered “personal.” “Commercial exposure” can be defined by whether or not you have a money-making motive, receive money or other compensation for the use of your horse, or file income taxes reporting horse related income and expenses. Allowing an instructor to use your horse for lessons in exchange for a reduction in boarding costs, or for personal lessons for yourself can be considered a commercial use situation. Assessing your horse activities for commercial use is important when it comes to liability insurance. This is because your horse may already be insured for liability under your Homeowners or Farm Owners Policy, if you have one. However, coverage will depend upon whether your horse is used commercially or not and for what activities.

Before buying a Horse Owner’s Liability Policy, you should determine if you are already insured for horse liability. Keep in mind that even if your horse is not used commercially, you may find that some Homeowners or Farm Owners Insurers exclude horses from coverage or may have a limit on the number that can be insured. Your policy may contain exclusions against riding or showing of horses, or taking horses away from your premises. So you should read your policy for horse related exclusions and check once a year with your Homeowners or Farm Owner’s Insurer to be sure its liability insurance applies to your personal horses and activities. If the Insurer will not insure your horses, or you do not carry a Homeowners or Farm Owners policy that includes horse liability, you should purchase a Horse Owner Liability Policy from a specialist [such as Ark Agency].

Let’s consider liability insurance and commercial exposures a little more. If you own full or part-interest in a horse that is used commercially, that is a horse from which you receive money or compensation for its services, your Homeowners Policy excludes commercial activities and will not insure it for liability. A Farm Owner’s Policy provides commercial farm liability so may consider breeding or raising of horses to be an insurable commercial farming activity.  While the farm Insurer may be willing to insure a mare or stallion for breeding at your premises, it may not be willing to insure horses for use in lessons, horse drawn vehicle rides, disabled riding, equine assisted services, or racing. It may not insure a breeding or race horse owned in partnership or that is owned by members of a syndicate. Your commercial-use circumstances may require you to purchase a Horse Owner’s Liability Policy to assure proper coverage.

How Risky is Horse Ownership? Moderate.

Horse activities are reasonably safe compared to many other activities people participate in. Yet, horse-human activities do carry inherent risks. Accidents do happen when people at different stages of capability attempt to touch, handle, train, ride, drive and control large animals that are unpredictable even when well trained. And some horse-human accidents are serious. Even with the best of intentions and management practices anyone can have a claim made against them and be sued.

You Must Plan Ahead – A Five Pronged Strategy

No one wants someone to be injured on or in relation to their property or business operations. No one plans to have an accident that results in a liability claim they are responsible for. Yet, you still must plan against and for an accident, and there is a five-pronged strategy you should follow:

  1. Accident Avoidance is the first strategy. This is best accomplished by implementing a thoughtful operational risk reduction plan that provides a reasonably safe physical environment and procedures for horses and people. All staff members should be trained in those practices. [NAHA Risk Reduction Programs can assist you.]
  2. Emergency Procedure Planning is the second strategy, and it can be important to minimize the severity of an accident and provide proper care at the time.
  3. The third strategy is to use well-worded Warning and Release of Liability Agreements. [NAHA can provide contract models for you to evaluate and use.] Have them completed and signed completely and correctly by all participants. Keep the signed forms on file and safely stored for several years as suggested by an attorney in your state.
  4. The fourth strategy is to carefully review and comply with your state’s Equine Activities Immunities Law, if your state has one. All states have some form of the law except California, New York, Maryland, and Nevada. Some require special wording in warning and release agreements, and some require posting of specific warning signs on your property.
  5. Purchase an Equine Liability Insurance Policy that adequately covers and lists all of your specific activities in the policy. The policy should be placed with an A rated domestic insurance company having a good reputation for service, knowledge of equine risk, and for handling equine liability claims. Be wary of low pricing, as generally a low price means something important is missing in the policy or the Insurer may not understand how to price equine exposure. This important fifth strategy can protect you and your business from financial loss should an accident happen. It helps fulfill the sense of responsibility you have about serving the public, but it provides more than peace of mind. In event of a covered claim, the Insurer provides legal defense and pays for defense costs. It pays for claims costs and settlements made against you up to the limits of your policy. Just as important is the fact that knowledgeable professionals will handle and manage the details of your claim in a way that looks after your claim and litigation interests, so that you can continue functioning with the least amount of “hassle.”

Equine Activities Immunities Laws have been passed in 46 states. While these laws may help you avoid liability, they will not usually thwart a determined injured party from pursuing a claim or law suit. This is because to receive immunity under the law, the activity sponsor must have performed in a specific way according to what the law requires. And often immunity is determined through some type of expensive legal proceeding that can result in a large, often uncontrolled expense to an uninsured stable owner. You still need to be properly insured for liability.

Related Coverages To Consider

If You Rent the Property You Occupy, We Can Also Insure Your Tack, Equipment, and Machinery for Loss or Damage

As a horse owner and property renter, you may not have access to property insurance for tack, equipment and machinery you own and use. Ark Agency can insure these items by adding a Property Coverage Endorsement to the General Liability Policy. Additional premium is charged for this endorsement and the items and values must be declared in the application process.

General Liability Coverage & Limits

The General Liability Policy includes specified maximum limits or amounts of liability insurance for:

Medical Expense: Pays for low cost medical expense with no questions asked about your liability or responsibility in the matter.

Legal Defense Costs: Today court costs and hiring of a lawyer can quickly mount to $50,000 or more, an expense you do not want to come out of your pocket if you are sued and have to hire a lawyer.  If sued in relation to this activity,       the policy provides legal defense whether the case has merit or not.

Settlement or Claim Costs: For bodily injury and property damages for which you are responsible and held negligent and liable.

Four common claim incidents for Horse Owners are:

1. A gate is left open and your horse gets into the road and is hit by a car, or it tramples the neighbor’s gardens, lawn or     field crops.

2. You allow a friend to ride your horse and he or she falls off and breaks an arm or worse.

3. Your horse kicks and injures a third party when you are at a trail ride or show, or it gets away from you and into the         roadway causing a car accident.

4. Your horse injures a farrier or veterinarian who is servicing or treating the horse.

Where to Begin

Your insurance needs are unique, therefore we believe in person to person service. Call or e-mail an Ark Agency Representative for an estimated premium, policy and company details, and qualification requirements. We work with several insurance companies and rates and coverage conditions vary. We will help you determine which application to use and advise on how to put insurance in force.

*General information is provided on this insurance topic. Acting on our coverage recommendations does not guarantee coverage if you have a loss or claim.

 

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