Insurance: Are You Covered?

By Stephen Hall

Can you think of a barn management chore more exciting than reviewing your insurance policy? OK, pretty much all of them. But when an accident happens or an injury or illness leads to a mountain of veterinary bills and legal defense fees, you will be glad that you took the time to make sure that your business has the coverage it needs. The cost-conscious horse business owner will also feel at ease with the knowledge that money is not being wasted on too much or unnecessary coverage. The time that you set your budget each year and do your show and event planning is also a good time to go over your insurance coverage. A discussion with an insurance agent knowledgeable about the horse business will save you money, stress, and may even save your business in the event troubles arise. What follows are some of types of coverage that you should discuss with your agent:

Care, Custody and Control (CCC) Coverage (CCC): This is a policy for boarding stables that protects your business in the event you are found negligent in the death or injury of a horse under your care. It is important to note that CCC applies to your boarders’ horses, specifically; horses that belong to you, the business owner, are excluded under this policy.

Commercial Equine Liability Coverage: This is the general liability policy for operators of any kind of horse businesses. Commercial liability insurance pays the damages for liability imposed upon your business by the laws which vary by state. It covers the cost to defend your business in the event you are sued. If you need a legal defense the bill can add up quickly. On top of that you may need to pay a settlement or a judgment if you are found liable. Give careful consideration to the per-incident and aggregate amounts on the policy you purchase and the impact on your business should a lawsuit exceed the limits of your coverage.

Farm and Ranch Coverage: This covers real and personal property specific to the type of facility you may operate as a horse business owner. Talk to your agent about values of depreciating buildings and equipment. You may find an opportunity to save money by reducing unnecessary coverage.

Workers’ Compensation Coverage: Employees are not covered under general liability policies so getting Workers’ Comp will cover you in the event an employee is injured. It is also advisable to require any independent contractors or vendors that you work with present proof that they hold liability insurance and request that they name your business as an Additional Insured on their policy.

Equine Mortality and Theft Coverage: Substantially, this is life insurance for your horses. It covers the loss of a horse for reasons other than the owner’s negligence. Some policies include limited coverage for colic surgery, but note the medical/surgical option described below.

Major Medical and Surgical Coverage: Medical/Surgical is an add-on to the Mortality policy that covers the treatment for injuries and illnesses. Your decision to purchase this optional coverage may be influenced by recent research showing the price of a colic surgery can range from $5,000 to $10,000, with many variables tied to post-surgical care.

Other types of policies that may be applicable to your business include Loss of Use Coverage, Stallion Infertility Coverage, Show and Event Liability, and Named Perils Coverage for certain risks not covered under your standard policies.

As your business evolves or changes, your insurance needs change accordingly. Over time buildings and equipment depreciate, you gain more clients and board more valuable horses, you start running horse shows, or you’ve stopped your breeding program. Each of these business changes warrant changes to your business’ insurance coverage. Neglecting this important aspect of stable management could have an enormous financial impact on your business.

This article originally appeared in Stable Beat, an e-newsletter by Stable Management magazine,www.stable-management.com