Navigating Equine Insurance

Equine insurance specialist Laura Connaway answers reader questions to help horse owners better understand the ins and outs of insuring their horses and equine businesses.

It’s distressing to even think about, but if your horse colicked tomorrow and needed emergency surgery, could you afford it? If he died suddenly, would it be financially feasible for you to replace him? What if he got loose at a show and injured a spectator, who then sued you to pay for medical expenses?

Given both the emotional and financial devastation of such potential situations, every horse owner needs ready answers in place for questions like these before an emergency arises. An equine insurance policy on your horse could make the difference between losing and keeping him—or between going bankrupt and staying solvent.

Having an equine insurance policy on your horse could make the difference between losing and keeping him—or between going bankrupt and staying solvent. ©Alana Harrison

We talked to equine insurance specialist and show jumper Laura Connaway, who owns Connaway & Associates Equine Insurance Services, Inc. to help answer some common questions about insuring your horse.

Insurance on a Leased Horse

Q: I’m curious about insurance for a leased horse. Do you recommend that the lessee take out an insurance policy or should that be the responsibility of the horse’s owner?

A: In insurance terms, a person can insure a horse as long as they have an insurable interest (a financial stake in the horse that would result in monetary loss). Some examples of insurable interest include the lessor (the horse owner), co-owner or lessee (the individual leasing the horse). Full mortality coverage is the base coverage; it provides reimbursement up to the insured value of the horse for theft or death from any cause, including authorized euthanasia.

Euthanasia needs to be authorized by the insurance carrier; it is determined on a claim-by-claim basis. Policy holders and the claims adjuster stay in communication to determine if euthanasia will be authorized using American Association of Equine Practitioners (AAEP) guidelines. Medical coverage for non-routine care can be added to the full-mortality policy. In this discussion, I have assumed the policyholder has added medical coverage to the policy.

All equine insurance carriers require notification when a horse is leased. The insurance carrier will typically require the lease agreement to state the names of the lessor and lessee, the term (time frame of the lease) and the annual cash lease price. This price is the amount paid for the use of the horse and does not include the cost of board, maintenance or training. If a horse is leased and the lessee is only responsible for board and maintenance with no payment for use of the horse, this is referred to as a care lease. The mailing and email addresses should also be provided for both parties named in the lease.

It’s important that horse owners add a lessee’s name to an existing policy that covers non-routine medical expenses. Since lessees often pay for veterinary care for the duration of the lease, they would be eligible for reimbursement for any covered medical expenses. ©Amy K. Dragoo

Typically, insurance carriers prefer lessors insure the horse, because it allows the horse owner to maintain control of the insurance policy and thus ensure it’s kept in place in the event the horse is returned from the lease ill or injured. Besides being a requirement of the insurance contract, it’s also important that horse owners add a lessee’s name to an existing policy that covers non-routine medical expenses. Since lessees often pay for veterinary care for the duration of the lease, they would be eligible for reimbursement for any covered medical expenses. Additionally, this allows the lessee to contact the insurance agent or claims adjuster if necessary.

While the lessee can take out the policy in their name and name the lessor as the loss payee, this can present a significant downside to the lessor/owner. For instance, if the horse is ill or injured and the lease is terminated, the horse may be in an uninsurable condition, and the horse owner may not be able to re-insure the horse, or the coverage may be restricted by exclusions for the existing illness or injury. With most carriers, the lessee is not able to transfer an existing policy from their name to the lessor’s name as insurance policies are not transferable. Some carriers provide an exception that will allow the policy to be transferred from the lessee to the lessor. Check with your agent to see what your carrier allows.

Equine Facility Coverage

Q: I’m interested in insurance for my equine facility. In particular, how would I cover liabilities for customers and people riding and working on my property?

A: Having appropriate insurance coverage is an important component of any equine business. I advise consulting with an insurance agent that specializes in Equine Farm and Equine Liability insurance to determine what types of coverage are necessary for your specific operation. While having insurance will not prevent liability—for instance, if your horse gets loose at a horse show and injures spectators or causes an auto accident—it will help protect your assets and assist with defense costs in the event a claim or lawsuit is brought against you.

Commercial Equine Liability coverage is exposure specific, meaning you must disclose all activities (potential exposures) involved in your operation to the insurance carrier. A few examples of equine activities/exposures include horses you own, any privately owned horses you board and care for (not owned by you), riding instruction you or your employees provide, training services for boarders’ horses, horse sales and equestrian camps.

You also need to notify your carrier if you add or alter any activities at your facility. If, for instance, you’ve declared riding instruction as the only activity on your policy application and then later decide to hold an equestrian camp, you need to alert your insurance agent about the new activity, request coverage and await approval for camp activities before coverage will be provided.

Your insurance carrier will also request copies of the liability hold harmless/release forms, boarding/training/sale contracts and require your business to post state-specific equine activity liability law warning signs. For equestrian businesses, we recommend consulting with an attorney familiar with equine law to draft liability release forms and boarding/training/sale contracts that address your specific exposures.

When insuring an equine facility, your insurance carrier will require your business to post state-specific equine activity liability law warning signs. ©Alana Harrison

If you plan to hire employees to help operate your business, you will also need workers’ compensation to provide liability coverage in the event an employee is injured while working under your employment.

For equine operations that involve having non-owned horses (horses owned by others) in your care, you should consider Equine Care, Custody or Control (CCC) liability coverage. This is very important insurance coverage for all horse operations that involve non-owned horses. You should consider this coverage if you board, train or breed horses for others. If one of those horses is injured, stolen or dies while in your care and you are found negligent/legally liable, this policy will provide for the medical care or replacement cost of the horse up to the policy limits. Defense costs are also covered up to the per horse policy limits.

CCC coverage includes incidental transportation coverage for the transport of non-owned horses in your care while in the continental U.S. and Canada. The transportation must be incidental only, meaning the horse must be a boarding, training or student horse in a regular program with you. There is no coverage for commercial hauling (horses that are not in a boarding, training or lesson program with you).

Insurance and Colic-Surgery Reimbursement Programs

Q: How does equine insurance work with colic-surgery reimbursement programs?

A: Since a number of companies offer colic-surgery reimbursement programs—all with different eligibility protocols and long-term enrollment requirements—consult with your insurance company’s claims adjuster to understand if these programs would be compatible with your current policy.

In the event your horse needed colic surgery, the claims adjuster would evaluate the claim, recommend a claim amount and then work with the reimbursement program’s administrators to determine which entity would have the primary responsibility (the first entity to pay medical expenses) or the secondary responsibility (the entity that will pay after the first entity has exhausted the limit of coverage). Each colic surgery case would be determined on an individual basis.

About Laura Connaway

Laura Connaway of Connaway & Associates. Courtesy Sandy Gregory Photography

Laura Connaway founded Connaway & Associates Equine Insurance Services, Inc. in 1992 to help horse owners better understand equine insurance and what policies they should consider. Since then, the agency has grown to one of the largest of its kind in the U.S., while also insuring horses and farms in Canada and Europe. Connaway is grand prix show jumper— often competing aboard home-bred horses—and is a member of the United States Equestrian Federation, the United States Hunter Jumper Association and the United States Dressage Federation. She and her husband, John Naill, live on a farm near Pinnacle Mountain State Park in central Arkansas with their horses, dogs and cats.

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