Yes, You Need Equine Liability Insurance

As your mother said, "It's only fun until somebody gets hurt."
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As your mother said, "It's only fun until somebody gets hurt."

Few events in life can match the punch-in-the-gut feeling of being greeted by a process server who politely presents you with a lawsuit. Yet it happens every day. Download a PDF of this article here.

Self-focused competitors rushing in crowded areas at shows can look like an accident waiting to happen.

Self-focused competitors rushing in crowded areas at shows can look like an accident waiting to happen.

We live in a veritable minefield of potential litigation where high-dollar verdicts can take your business, your home, your life savings and everything you own, despite state equine liability laws (in effect in all states but New York, California, Maryland and Nevada) and signed hold-harmless waivers.

If you think that you won?t be sued when your horse kicks a child or escapes from its pasture and collides with a car, give us a few moments of your time, please.

First, a reality check: Anyone can sue anyone. That equine liability law sign you posted in your barn doesn't cast magical powers that protect you from a lawsuit. Those waivers that you so diligently have people sign won't protect you either.

Yes, they may help in your defense at trial, but they won?t pay the attorney fees (figure $500/hr.) that you will incur before your lawsuit even sees a courtroom. And, once it does, you're rolling the dice that you won't be found "liable" (the court's legal term for "guilty") for the damages of an injured party.

Protect yourself now. Get a good liability insurance policy that provides a lawyer to defend you and pays claims against you if you lose.

Anyone who owns a horse can get liability insurance. When deciding on the type of policies you need, it's important to consider all the activities in which you engage and get coverage for all of them.

PERSONAL EQUINE LIABILITY.

If you keep your horse at home or board at a stable and aren't engaged in any equine activity for which you are paid, personal equine liability insurance may be all you need. It protects you in case your horse injures someone or does property damage. Such policies typically offer liability limits ranging from $100,000 to $1 million (per each separate occurrence) and annual aggregate limits of $200,000 to $3 million. Base premiums run $150 to $300/year.

Personal equine liability insurance won't cover any activity that could be considered commercial in nature (i.e, giving paid lessons, getting paid for training or boarding). When applying for personal equine liability insurance, the underwriter will ask for full disclosure as to your horse activities. Be honest and thorough. What is not disclosed, will not be covered should something untoward happen.

Before investing in personal equine liability insurance, check with your homeowner's insurance carrier. It may provide coverage for your horse activities if you have your horse on your property or if you board, but you must ask.

A homeowner's umbrella insurance policy can also provide additional coverage. Most homeowner's insurance policies are silent as to equine coverage. If your agent says your homeowner's policy will cover claims resulting from your horse, be sure to get it in writing.

CARE, CUSTODY AND CONTROL. If you board horses (even for short stays), you should obtain care, custody and control liability insurance. This insurance protects you from liability should a horse in your care suffer an injury or die. These policies cover the mortality of a horse or the cost of veterinary care up to the limit of the policy. it's important even if the horses you care for are insured, as an owner can still sue you. Base premiums for care range from $275 to over $1,000, depending on the amount of coverage you buy.

An insurance company providing care, custody and control insurance will expect that you conduct your barn activities according to a reasonable standard of care.PROFESSIONAL LIABILITY INSURANCE. This provides coverage to riding instructors, trainers and clinicians in the event of a claim or lawsuit resulting from a negligent act, error or omission related to their professional equine activities.

Is someone responsible if they spook your horse on a trail ride and you fall off (without a helmet on!)?

Is someone responsible if they spook your horse on a trail ride and you fall off (without a helmet on!)?

Riding instructors are often under the mistaken beliefs that a student has assumed the risk of riding, and the signed waiver and state equine protection law will protect them. They also often think they aren't going to be sued because it's the barn owner with the "deep pockets" (legal slang for the person with a lot of money) that the injured person is going to pursue, not them.

Unfortunately, hold-harmless waivers and equine liability laws aren't bullet-proof. In order for the assumption of risk defense to protect you, the rider must be fully aware of all the dangers that horses pose. (Nearly impossible, right?)

As to the misconception that your students will only sue the financially well-endowed farm owner and not you, here are four little words for you to remember . . . "joint and several liability."

This legal term means that when a lawsuit is brought, a lawyer is going to cast a wide net and everyone is going to be named as a defendant.

If you're told you're included in the farm owner's equine general commercial liability insurance be sure that it names you as an additional insured.

If you're an independent instructor or clinician who travels to different barns, get your own equine professional liability insurance that covers you wherever you go. Be sure you also protect the owner of the facility where you are teaching by naming them as an insured.

As a side note, if you're an instructor who brings your dog to the barn, your professional liability insurance will likely not cover bodily injury or property damage caused by your canine partner.

HOW MUCH INSURANCE DO YOU NEED? Recent verdicts in equine liability lawsuits have ranged well into the millions of dollars, so it's best to protect yourself. Some insurance agents are reticent to tell you exactly how much insurance you should buy, fearing that if you buy the amount they tell you and are then sued for a greater amount, you may sue them for bad advice.

The simple answer to this question is to buy as much insurance for all the activities you engage in as you can afford. Read your policies carefully. Shop around and compare, but be sure to go with a reputable agent and company. Check with your regular insurance agent and consult the companies in our equine mortality and equine major medical stories.

MINIMIZE YOUR RISK. Liability insurance is paramount, but minimizing your risk is also wise:

1) Consult with an attorney who is familiar with horses, equine business and personal injury lawsuits. Together, sit down and do a "Legal Audit" of your horse activities to identify your potential equine liability issues and determine the steps you need to take to protect yourself. Most state bar associations offer lawyer referral services that can assist you in finding an appropriate attorney.

In recent years, "prepaid legal service" businesses have come on the scene. For a yearly membership of around $250, you get access to an attorney to answer your legal questions. These programs have mixed consumer satisfaction, so be careful. Prepaid legal services aren't a substitute for liability insurance.

2) Incorporate or form an LLC. If you're engaged in a commercial horse business, consider forming your own corporation or limited liability company (LLC). Incorporating or forming an LLC will protect you from personal liability should you be sued. In other words, your personal assets can't be taken.

BOTTOM LINE.

 The adage "An ounce of prevention is worth of pound of cure" is only too true. Keep in mind that most states have a "statute of limitations" on bringing a lawsuit, which means that just because an event happened a couple of years ago, you could still be sued. And you can't get insurance for an event that's already occurred. Horses and riding are wonderful activities, but as your mother may have told you, "it's only fun until someone gets hurt."

Click here for additional information on commercial liability, club liability and insurance coverage needs by activity.

Article by Susan Quinn, Esq., a Horse Journal Contributing Writer.