Whether you run a horse boarding facility, training business, or riding school, you’ll need liability insurance to protect you from lawsuits that can derail your equine business. Liability insurance pays for property damage, bodily injury, and medical payments that result from an accident on your property. This coverage can also help pay for legal fees if you’re sued.
If you board horses or train them, care for other people’s horses in breeding, training, showing, or racing them, consider purchasing “care, custody, and control” liability coverage (also known as third-party property damage). Equine liability insurance policies generally exclude claims involving property the policyholder does not own. They cover injuries or damage to others’ property and legal liability for these incidents. This type of specialized coverage is usually available differently, and premiums are based on the size of your horse operation and the value of your animals. Typically, policy limits are between $5,000 and $200,000 per animal and $25,000 to $500k maximum loss per year.
Many horse owners are surprised to learn that their primary homeowner’s, farm owner’s, or renter’s insurance policies do not cover them against liabilities their horses generate when they are stabled on their property.
A homeowner who allows their horses to roam freely in a fenced-in yard, for example, is at risk of being sued if their horse harms someone or causes damage to another’s property. The same goes for a private horse owner who allows friends or family members to ride their horses or uninvited passers-by to pet them. The good news is that many states have equine activity statutes that provide liability protection for professionals and sponsors of horse activities. These statutes often require the participants to wear helmets, have proper tack and equipment, and sign waivers/hold harmless agreements. These requirements are designed to help protect you from liability claims and assist with defending a lawsuit.
In addition to mortality, liability, and property insurance, horse owners should consider medical payment coverage. This coverage reimburses you for veterinary bills associated with medical treatment, diagnostics, or surgeries your horse needs. This is especially important if you have a young or inexperienced horse or your horse suffers an injury while you are away. For example, if your horse has a puncture wound that requires X-rays or acupuncture to heal, it could quickly rack up several thousand dollars in veterinary costs. Unlike mortality insurance, which pays out if your horse dies from a specifically named peril (such as transport or fire), significant medical and surgical policies are usually offered as endorsements on whole mortality policies for an additional premium. These policies typically base their financial limits on your horse’s fair market value, which the company must substantiate. They aren’t highly profitable for insurers, so choose a stable company. It is also essential to understand the exclusions and requirements of these policies before you purchase them.
Liability limits are necessary because they help protect your assets and reduce the risk of a lawsuit. They are often a part of farm and ranch policies or can be purchased separately as an equine commercial liability policy. In addition to property damage, bodily injury, and medical payments to others, a horse owner may also be liable for injuries to people who come onto their property. This can include uninvited visitors such as trespassers or children injured while visiting a horse. Care, Custody, and Control Liability is another optional coverage that can be incorporated into a liability policy or purchased on a stand-alone basis. This coverage will pay for the value of a non-owned horse that you board or train if you are found to be negligent. Understanding your liability exposure is crucial in understanding your state’s equine statutes. This will help you determine whether your activity is a business or personal pursuit.