Insure Your Horse Boarding Business for Liability

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If you board horses that belong to other owners, and you charge a fee or accept payment in the form of work or other kinds of compensation, you have a commercial horse venture that requires special insurance to be covered properly for liability.  A Homeowners Policy insures only personal (non-commercial) activities, so commercial activities are not insured under this policy.   A Farmowner’s Policy is like a homeowners policy with the addition of commercial coverage for raising, keeping and sales of livestock, grains, crops, and ag products. Therefore such a policy will also not insure against liability for horse boarding unless the Insurer specifically agrees to do so by endorsement.

A primary liability concern is the potential for a horse owner, their family members, and guests to incur bodily injury while on or near the property. The stable owner should insist that the horse owners provide proof that their horses are insured for liability, but the horse owner’s policy does not insure the liabilities of the stable owner.  Another primary liability concern is the potential for someone to leave a gate open, or for fencing to be damaged, and boarded horses to get into the road and be hit by a car.  Such a claim can result in bodily injury to passengers and property damage to the car.  As a stable owner, you worry that you may be sued or otherwise have a claim for bodily injury or property damage.  If sued, you may need to hire a lawyer to defend you.  If found negligent, you would be responsible for the cost of the claim.  Fortunately, much concern can be relieved when you buy a Commercial General Liability Policy [GL] to insure your horse boarding activities.

How Risky is Horse Boarding? Moderately High.

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

There is a secondary liability concern for boarding stables, and that is for the loss, illness, or injury that may happen to a boarded horse in your care. This exposure is commonly known as Care, Custody & Control Liability (or Animal Bailee Liability). Horses can escape their enclosures, they can become injured on a fence, in a pasture, in their stalls, or while being ridden on trails, and in rings and arenas which you are responsible for maintaining.  You may not haul horses commercially, but if you haul horses for other people on occasion to the vet, for training, or to events, you also have this exposure. The horse owner should be encouraged to carry a limited or full mortality policy on their horses, which may include surgical and major medical insurance.  While this will help, again, it is for the benefit of the horse owner and will not cover liability claims made against the boarding stable owner.  Liability claims involving loss, injury or damage to a boarded horse should be insured under a policy or endorsement called Care, Custody & Control Liability Insurance.

This type of coverage insures you against financial loss if a non-owned horse in your care becomes sick, injured or dies and the owner attempts to hold you responsible for the loss because of your negligence. This type of insurance is not included in your General Liability Policy unless requested by you and added by endorsement, or provided as a separate policy.  If you board, handle, or care for horses owned by others, be sure to ask for this additional coverage by completing that part of the application and choosing the limits that are right for you.  Our underwriters will then quote it and you will have a chance to decline or accept this valuable insurance protection.

If You Rent the Boarding Stable Property Your Business Occupies, We Can Also Insure Your Tack,  Equipment, and Machinery for Loss or Damage

As a stable property renter, you may not have access to property insurance for tack, equipment and machinery you use in your business. 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 provides specified maximum limits or amounts of liability insurance for:

Medical Expense: Pays for a claimant’s low cost medical expense with few questions asked about your liability, responsibility or connection 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 the insured activity, the  policy provides legal defense whether the case has merit or not.

Settlement or Claims Costs: Pays bodily injury and property damage claims for which you are held responsible.

Common Liability Claims

Four of the most common claim incidents for boarding stables are:

1.  A boarder is injured in your arena, in the stable area, or on your trails when their horse spooks or acts up due to a hazard you were responsible for containing, controlling, or marking.

2.  A visitor comes to your property with a boarded horse owner and is injured while petting horses, watching the rider, or when he or she rides the boarded horse.

3.  A fence is damaged or barrier gates are left open and a boarded horse gets loose and runs into the road. A car accidentally collides with the horse.  The incident results in bodily injury claims on the driver and passengers, property damage to the vehicle and contents, and a care, custody & control claim for loss of the horse.

4.  A boarded horse not owned by you gets injured or dies while in your care or on your property because of something you did not do to keep the horse safe, sound, and healthy.

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 horse 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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