If you board, breed, race, train, give riding lessons or conduct any kind of business-related equine activity, I highly recommend that you consider a Commercial Equine Liability policy.
Homeowner’s and standard Farm & Ranch insurance policies completely exclude your equine business pursuits.
Commercial liability insurance pays the damages for liability imposed upon you or your business by a liability claim or court judgment. It also pays the cost of defending you when a lawsuit is brought against you.
This policy kicks in when an accident occurs and someone is hurt, regardless of whether you own the horse involved.
However, the basic Commercial Equine Liability policy does not cover claims for damage to property in your care, custody or control. If someone claims, for example, that you injured their horse in the course of training it, you would need a Care, Custody & Control policy to cover that damage claim.
The Equine Activity Laws may help you provide a defense in the event of an equine incident, but they will not prevent you from being sued. Without adequate liability coverage you will have to pay damages and defense costs yourself. And the Equine Liability Laws only cover “inherent risks” in equine activities. Some plaintiffs are able to successfully argue that their situation did not involve an “inherent risk”. In other words, you could lose the case. It bears repeating that defense costs are generally not recoverable by defendants in
Commercial Equine Liability policies are designed to help protect you if you are sued by a third party who is injured or whose property is damaged. A third party is generally someone who is not a family member or employee.
If you have employees, you should consider carrying workman's compensation insurance as they are not covered under the general liability policy. You should also make sure that any independent contractors that work with you show proof of their own liability insurance and ask that you be named as an Additional Insured on their policy. This is especially true if you have an independent instructor or trainer working at your facility.
In addition to this policy, I recommend that all equine businesses 1) post the applicable Equine Activity Law in your state in conspicuous areas in your barn and on your property; and 2) have each third party who uses your facility sign a liability waiver that contains a covenant not to sue and specifically waives liability for ordinary negligence.
Photo credit: Katarina 2353 (Flikr)