Horseback riding can be a risky business. Liability insurance is a very important consideration for any stable owner, horse trainer or riding instructor.
Every sport involves some risk, and horseback riding is among the most dangerous. If you’re a stable owner, horse trainer or instructor, you must give serious thought to limiting your liability. Certainly, when someone is injured, your first response is to see that he or she receives any necessary medical attention. Then you must ask yourself: Could this have been prevented? Who was at fault? Accident prevention is a key ingredient to limiting your liability – as is protecting yourself with liability insurance.
Accident prevention is a key ingredient to limiting your liability.
Commercial liability insurance
A liability insurance policy is issued to protect an equestrian professional, business or organization against liability claims for bodily injury (BI) and property damage (PD), medical payments, products and completed works, and fire legal liability. If you lease a facility, fire legal offers protection for a tenant’s liability for damage by fire to the rented premises. Incidental contractual liability is also provided, which would cover BI or PD for liability assumed under a lease of premise contract. The policy includes payments for defense in addition to the limits for the commercial liability coverage.
Make sure you read and understand the policy – all the coverages, conditions, rules and exclusions, including what you must do in case of a loss. You may be required to notify the insurance company within a certain timeframe in the event of an incident that could lead to a claim. Failure to comply with the rules may result in loss of coverage.
You should work with an equine insurance agency that specializes in this type of insurance. Whenever you have questions, don’t hesitate to contact your agent. If you own the property, inquire about farmowners insurance, which could cover your commercial equine operations as well as your personal liability, in addition to your buildings and their contents.
Limit your liability
First, consideration should be given to forming a legal entity that will limit your personal liability such as a Limited Liability Company (LLC) or Partnership. This would protect your personal assets, as a claim would be against the company and not you as an individual. Do consult with an attorney.
Require all who come to your facility to sign a Release of Liability and Waiver agreement (Hold Harmless agreement). This puts the signer on notice that there are inherent risks related to taking part in equine activities. Obtain the advice of an attorney when drafting your release to make sure it is enforceable and in compliance with the statutes in your jurisdiction, and that it contains the proper language and is understandable. It is also very important that those who come to your facility be given sufficient time to read and comprehend the release before signing it.
Post warning signs (required in some states) and safety rules, including helmet requirements. Accidents happen – be prepared for that possibility and know who to call (911) or notify (a family member). You must also realize that a lawsuit could be filed. That said, be very careful what you say about the accident, since statements pertaining to fault could be used against you in a lawsuit. Don’t describe the accident to anyone other than your attorney or your spouse.
The insurance application
As stated earlier, select an agency that specializes in equine insurance and that chooses to represent carriers highly rated for their financial strength. In order to obtain a quote, you will be required to complete what appears to be a lengthy application. Not all the questions may apply to you, but it is important to answer any that pertain to your operations, as the application will undergo an underwriting process. Choose the limits you want or need. If you are operating on property belonging to someone else, you will be required to carry the same limits they do (e.g. $500,000/occurrence, $1,000,000 aggregate, or $1,000,000/occurrence, $2,000,000 aggregate).
Premium quotes are based on risk categories since some activities pose a higher danger than others. A breeding farm with little public exposure will be rated much lower than a riding stable with non-owned horses in training, or a riding lesson program using school horses. Rates are based on actuarial results. Once the premium is determined, the carrier may allow what is termed an individual risk premium modification (discount). For example, a riding instructor who has achieved certification, or an insured individual who has had no losses in “x” number of years, may qualify for a premium reduction.
Once your application is accepted, you have paid the premium and the policy has been issued, do not neglect to advise your agent of any significant change in your operations. For instance, perhaps you decide to include a riding clinic or summer camp that was not declared at the outset. You must notify your agent so the policy can be endorsed to reflect additional coverage. By the same token, you may decide to have a pool party for your students. This would call for an exclusion to be placed on the policy – not covered!
Related topics to explore include employer liability, volunteers and/or independent contractors working on your property, the liability for non-owned horses in your care, and so on. Wherever risk is involved, there is probably an insurance product to cover it. Be sure to ask your agent!
Limited equine liability laws
Over 40 states have adopted limited equine liability laws. But it’s a misconception to think they prevent anyone from bringing suit against you, and that you therefore don’t need insurance. These laws vary from state to state, but most of them essentially specify that persons who engage in an equine activity cannot bring suit if injured as a result of the inherent risk of the sport.
However, most laws contain exceptions under which you can be found liable. These include: faulty tack or equipment, dangerous land (latent hazardous conditions), mismatched horse and rider, wanton and willful misconduct (gross negligence), intentional wrongdoing, and negligence. Negligence is generally defined as “someone not taking the care that a reasonable and prudent person would take in a similar circumstance”. A good example is forgetting to tighten a cinch before someone mounts your horse.