Insure Your Horse Breeding Business for Liability

livestock insurance

If you raise horses and / or own a stallion that you use to service your own mares or those owned by other people, you have several moderately high and unique liability exposures that will not be covered by your Homeowners Policy, and may not be by your Farm Insurance Policy.  If you have a money making motive with your horses, you have a commercial horse venture that requires commercial liability insurance.

Those who breed their own horses may have these commercial exposures or activities:

Horse sales, open house events, visitors to your farm, advertising & promotion, and showing, exhibiting, riding or driving of your horses for promotional purposes both on and off premises.

If you stand a stallion at public stud:

You also have a Horse Boarding and Care, Custody & Control Liability Insurance (CCC) exposure because you care for mares and foals owned by others. Some farms also provide foaling services which is another CCC exposure.

 How Risky is Horse Breeding and Incidental Exposures? 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 worry that you could be sued or otherwise have a claim made against you for bodily injury or property damage by a customer, guest or someone else who comes in contact with you or the property that is part of your horse operations.  If sued, you will need to hire a lawyer to defend you and you wonder how you would go about doing this.  If found negligent or responsible, you would likely have to pay for either a court-ordered or agreed-upon settlement to the injured party.  Fortunately, much concern can be relieved when you buy a Commercial General Liability Policy [CGL] to insure horse breeding and incidental activities.

Commercial General Liability Insurance protects you from financial loss should a mare owner, a visitor to your farm, or a trespasser become injured [Bodily Injury] or their property is damaged [Property Damage] in relation to your breeding, boarding, horse sales and  promotional operations, and they make a claim or file a law suit against you for damages.

Care, Custody & Control Liability Insurance insures against your 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 insurance is not included in your General Liability Policy unless requested by you and added by endorsement or 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.

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 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.  The items and values must be declared in the application process and additional premium is charged for this endorsement .

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 of the most common claim incidents for boarding stables are:

1.  A mare owner visits your farm to see your stallion and is injured while there.

2.  A horse buying prospect tries out a horse you are offering for sale and is injured while riding it.

3.  A fence is damaged or barrier gates are left open and a horse you either own or board gets into the road. As a result passengers are injured and the car is damaged when colliding with the horse.

4.  A horse that is cared for but not owned by you gets injured or dies while in your care because of something you did or did  not do to keep the horse safe and healthy.

Where to Begin

Your horse 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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