What Is Equine Insurance and What Businesses Need It?

Provides Coverage for Horse Theft, Injuries, and Disease

Cowboy With Straw Hat Leads Brown Horse from Horse Stalls

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Breeders, trainers, riding instructors, and other equine businesses use horses in their day-to-day operations. Horses are a valuable asset, and a business may incur large expenses or lose income if a horse becomes ill or injured. An equine business may be sued if a horse hurts someone or damages their property. Such a business also may suffer a loss if a stable, barn, or equipment is damaged by a fire or other peril. But equine businesses can protect themselves from these unexpected losses by purchasing specialized insurance.

All states in the U.S. except Alaska, California, Maryland, and New York have passed an Equine Activity Liability Act (EALA). These laws were enacted in the 1990s to preserve equine-affiliated areas of the economy and to facilitate activities with horses. The laws transfer liability from the equine business or event sponsor to the participant for risks inherent in the horse-related activities.

EALAs are based on the idea that equine activities provide benefits for both businesses and participants. Horse-related activities have fundamental risks like falls, bites, and kicks. These risks are widely known, so participants assume liability for them when they undertake the activity. EALAs don't provide blanket immunity from suits. A business may be held liable for an injury to a participant if, say, it provided faulty equipment, failed to properly assess the participant's equestrian skills, or neglected to warn the participant of a hidden danger on the business' property.

Because EALAs vary somewhat from one state to another, equine business owners should understand how the law applies in their location.

Equine Liability Coverages

Because equine liability laws have exceptions (and are non-existent in four states), horse-related businesses need liability insurance to protect themselves from third-party claims. The types of this insurance coverage that a business needs depend on the nature of its operations.

Horse clubs and associations need equine liability insurance. They also need premises liability insurance if they own or lease premises. Equine liability insurance covers claims against a business for bodily injury or property damage suffered by third parties in accidents caused by horse-related activities, among other types of claims. Premises liability insurance covers claims arising from injuries that occur on a business' premises or from its operations.

Horse trainers and riding instructors need commercial general liability (CGL) and professional liability insurance. CGL insurance covers third-party claims for bodily injury or property damage sustained in accidents that arise out of the insured's equine business, whether the accident is caused by a horse, a trip-and-fall, or some other event. Equine professional insurance covers claims against a business arising out of negligent acts or omissions committed while providing horse-related services or instructions.

Horse farms and ranches need CGL and professional liability insurance, among other coverages. They also need property insurance to safeguard their business against physical losses to barns and other buildings. They can obtain these coverages separately or as part of a commercial package or farm policy.

Care, Custody, or Control

Equine businesses that breed, board, or train other people's horses may be held liable for injuries or damage those animals sustain while in their care. To protect themselves against claims, these businesses can purchase care, custody, or control insurance. This coverage is not included in an equine liability or general liability policy. Liability policies contain a care, custody, or control exclusion, which eliminates coverage for damage to property owned by someone else that's in the insured's custody.

Businesses can secure equine insurance by contacting a specialty insurer like Great American or Markel Insurance or a broker like Blue Bridle or the Equestrian Group.

Equine Mortality Coverage

Like people, horses can become ill or injured, and some may die. Horses are also subject to theft. The costs associated with the theft, illness, or death of a horse can be substantial for a small business. Fortunately, these costs are insurable.

Equine mortality insurance covers the theft of a horse, or its death by certain causes. This coverage may apply to "all risks" or just named perils. All-risk insurance covers theft, death by any cause (including illness or disease) not specifically excluded, and humane destruction. Named perils insurance covers death by the causes listed in the policy, but not illness or disease. These may include fire, lightning, drowning, and various other perils. Equine mortality insurance can be extended to include medical coverages like emergency colic surgery, medical and surgical expense, and stallion infertility insurance. To obtain mortality insurance and any extensions, a business owner must complete an application and submit it to the insurer. The insurer will require information in the application about the health of the animal, including any history of disease (including colic), previous surgery, medications, and genetic heritage.

Valuing a Horse

Mortality insurance compensates a horse owner for the value of an animal that has died or been euthanized due to a covered peril listed in the insurance policy. A loss is typically calculated according to the agreed value of the horse. This is generally the purchase price of the horse, or if the animal was homebred, the stud fee. If the value stated in the application exceeds the horse's purchase price, the insurer may require substantiation. The owner can justify a higher value by providing a show record for the previous 12 months, a breeding record (for both stallions and broodmares), or a training record.

Cost of Coverage

The cost of insuring a horse-related business depends on the size and nature of the operation and the types of coverages it needs. A horse club with no physical location needs less coverage and will pay less for insurance than a ranch with two dozen horses. Equine mortality premiums are usually calculated as a percentage of the agreed value of the horse. The premium for any additional coverages like emergency colic surgery or medical and surgical expenses may be a flat charge that varies by state. 

Key Takeaways

Running a small business that uses or cares for horses means being prepared for unforeseen losses or damage related to the animals. Several kinds of equine insurance coverage are available to protect business owners from third-party claims and the theft or death of a valuable horse. Insurers that offer this specialized type of coverage can help you determine what kind of policy, at what price, will best cover your equine and other horse-related assets.

Article Sources

  1. Michigan State University. "Detailed Discussion of the Equine Activity Liability Act." Accessed Feb. 27, 2020.

  2. IRMI, "Equine Activity Liability Acts." Accessed Feb. 27, 2020.

  3. Markel Insurance. "Horse Clubs & Associations." Accessed Feb. 27, 2020.

  4. Markel Insurance. "Commercial Equine Liability." Accessed Feb. 27, 2020.

  5. IRMI, "Premises Liability." Accessed Feb. 27, 2020.

  6. Markel Insurance. "Horse Instructors and Trainers." Accessed Feb. 27, 2020.

  7. Great American Insurance Group. "Care, Custody or Control." Accessed Feb. 27, 2020.

  8. Markel Insurance. "Horse Mortality Insurance." Accessed Feb. 27, 2020.

  9. Markel Insurance Co. "Determining the Insurance Value of Your Horse." Accessed Feb. 27, 2020.

  10. Equisure. "FAQ." Accessed Feb. 27, 2020.