Curious about insurance for horse owners? Check back every Wednesday through Sept. 8 for this three-part series that will cover horse insurance, liability insurance and farm insurance. Sponsored by Taylor Harris Insurance Services.
You double check to make sure the stall doors are latched tight, you top off water buckets, and you pick rocks out of your ring. You attend to every last detail when you’re protecting your horses from harm, but what are you doing to protect yourself?
Accidents happen, and—as every horse owner knows—they seem to happen more frequently when there’s an equine around. That’s why getting a liability insurance policy just makes good sense. Whether you’re running a large lesson and showing facility, or you just board a few horses on your farm for other owners, it’s essential to protect yourself from a lawsuit.
“In general, if you have more than three or four horses that you yourself own and ride for pleasure, a regular home-owners insurance policy isn’t going to cover it, even if you keep them at your home,” said Debi DeTurk Peloso, a horse insurance specialist with the Markel Insurance Company.
Covering your activities with a general liability insurance policy is a good idea, and if you run any kind of business—such as boarding, teaching, or training—you should look into a commercial general liability policy. Either general liability policy protects the named insured (the person holding the policy) against bodily injury and property damage lawsuits arising out of the operation they have declared, whether it be pleasure riding, boarding, training or teaching. That coverage follows the named insured parties wherever they go, not just on the property where the business is run. So, if you’re teaching at a show away from home, your general liability policy covers you.
If you’re a professional trainer and you’re running a boarding and training business out of a rented farm you don’t own, you should have a commercial general liability policy that protects you, as the primary named insured, and the landowners, as additional insured parties named on the policy.
“The named insured is responsible for paying the bills, but let’s say a lawsuit was brought after a student falls during a lesson, and the person sues not only the person operating the business and giving the lesson, but also the landowner. Then the policy would respond for both if the landowner was named as an additional insured individual on the policy,” Peloso said.
In general, the insurance company holding your general liability policy needs to know what activities are taking place, i.e., a small boarding operation or a busy lesson program.
Ask These Questions About Your General Liability Insurance
A general liability insurance policy protects the insured persons from financial ramifications arising from civil lawsuits. “A good general liability policy pays to defend you, investigate occurrences and then pays up to the policy limits,” Peloso said.
“Let’s say you have a $500,000 limit, and it cost the insurance company $100,000 to defend you and to investigate, then there is still $500,000 there to pay any award. That’s called paying outside the limits. Investigation and defense costs are paid outside the limits.”
Different insurance companies have different levels of limits for general liability policies—the limit is the amount the policy will cover for each incident. You need to decide which limit of coverage is best for you, and that decision rests on your assets and your possible risk level. “In general, you look to protect the level of assets,” Peloso said.
“If you have an older pick-up truck, a saddle you’re fond of, and that’s it, you would be perfectly happy with a $300,000 limit. If you have a beautiful farm with land worth quite a bit, you probably would want to look at a $1 million limit. One of the major problems we have in liability lawsuits is horses loose on the road. Another thing the insured party should ask himself is: ‘How good is my fencing?’ and ‘How far am I off major roads?’ ”
Premiums—or the amount you pay per year for the policy coverage—vary even within the coverage limits, depending on the amount and types of activity you’re engaging in.
“If you had a couple of boarders, 1-2 horses of your own and weren’t giving any lessons, or, if you have no boarders, one school horse and gave students some lessons on their own horses in a small operation, you’d probably be around the minimum premium. It goes up from there depending on the volume of activity and the limit set,” Peloso said.
Make sure your insurance company knows about all the activities on your farm—if you start boarding horses and don’t alert them to add boarding to your policy, then you’re not covered for that activity.
Asking participants in lessons to sign a standard liability waiver and asking boarders to sign a standard boarding agreement are good ideas.
“We strongly recommend it because it’s certainly a huge help in the event of a lawsuit. No one can sign away their right to sue, but in general, having a waiver is an excellent thing, as is a boarding contract or agreement which just spells out the understandings of each party. It’s just good business sense,” Peloso said.
Am I Running A Boarding Business?
If you have ANY horse on your farm that you don’t own, you’re technically running a boarding business, even if the horse belongs to a friend who doesn’t pay you anything.