Knowledge Source

Liability & The Horse Owner

Beverly Smith-Embry

For thousands of years, the horse has been the transportation, friend and burden bearer of man. The horse has been epitomized and romanced for his nobility, spirit, strength, speed and beauty in poetry, art and legend. Much history regarding the law and the horse exists in legal libraries around the world, most of which carry an understanding for the nature of the horse as a domesticated animal in an imperfect world.

In legal terms, a Tort is a private or civil wrong or injury, other than breach of contract, for which the court will provide a remedy in the form of an action for damages. In layman terms, when someone is in the wrong and injures another party or damages their property, that person must pay the damaged party for the damage done. The mere fact that someone is injured does not automatically mean that some other person has committed a tort and must pay for damages. A person must pay for the injured party’s damages only if she or he was at fault and liable.

Most states have enacted Equine Liability Immunities Law. These laws are often helpful in determining liability and in reducing settlement values. However, the fact that such a law exists in your state does not do away with your need for liability insurance. These laws are limited in the immunity they provide according to how each law is written and specific conditions the operator must abide by to trigger immunity. Every claim is unique. Circumstances surrounding a specific claim or incident involve variable factors. Keep in mind that anyone can be sued for almost anything. The fact that such a law exists in your state may not deter someone from suing you. The effectiveness of the Equine Immunities Law will be determined through expensive court proceedings. However we strongly suggest that if you have horses on your property, you contact your state for copies of your state’s Equine Liability Law and post the law in your barn and on fence around your property.

If you have a horse boarding operation, training operation or offer riding instructions, you should have every customer sign a well-written liability release. Once again, the executed document could deter someone from taking legal action against you or often reduce the amount of a settlement. Yet, a release of liability will not stop someone from filing a lawsuit against you if they sustain damages.

Third Party Liability Insurance protects you when you become legally obligated to pay sums as damages because of bodily injury or property damage to others. In the event of such an occurrence, the insurance company has the right and duty to defend any “suit” seeking damages whether groundless or substantial. As third party coverage, this type of insurance does not pay the named insured or his or her family member for damages or injuries nor does this type of insurance pay for damages or injuries incurred by employees, contract laborers or volunteers working on your behalf.

Personal Liability Insurance is non-commercial liability insurance that every person or family should have. This coverage will usually be part of a Homeowner’s or Tenant’s (renter’s) insurance policy. The personal liability section of these policies would protect you for financial damages caused to third parties in relation to your personal activities. Examples of claims that are common: A visitor (third party) slips and falls on your house steps; A visitor is bitten by the family dog; Your child throws a baseball through a neighbor’s window. Sometimes a Homeowner’s insurance policy which includes Personal Liability Insurance, could cover your “personally” owned horses, but not always. Therefore, it is very important to question your Homeowner’s insurance agent to determine if any liability insurance exists for your horse as some policies will have specific exclusions for horses. Also, some of these policies could provide liability insurance only while your horse is on your premise or could exclude accidents during the riding of a horse. Some Homeowner’s policies exclude all horses and horse activities from coverage and Personal Liability Insurance will not cover your horses if they are a business venture.

If you have personally owned horses, we suggest you contact your Homeowner’s insurance provider to determine if your insurance extends to your horses. If not, contact Smith-Embry Insurance Associates, Inc. as we can offer an Equine Personal Liability Insurance Policy providing coverage for bodily injury or property damage to others caused by your horses both on and off of your premises.

Personal Liability Insurance will not cover your horses if they are a business venture. Your horses are deemed to be a business venture if they involve a money-making motive or if you file an income tax return on your horses or horse activities as a business. Most importantly, if you conduct a horse boarding, training, breeding operation or provide riding instructions, liability insurance for your business is a must. Coverage is offered through a Commercial General Liability Insurance Policy and is customized to insure your specific horse related business venture. The cost of a Commercial Equine Liability Insurance Policy is based on your specific equine business, the exposure and risk involved. As an example, if you are strictly a boarding operation, your insurance premium could be less than a facility offering riding instructions. When considering this insurance, your agent should ask you specific questions about your horse operation and activities. Usually only declared equine-related activities are covered by the policy so if you start the insurance policy only boarding horses, but later decide to offer riding lessons, you would need to advise your agent of the additional activities for the insurance to apply.

If you have a horse business, please contact Smith-Embry Insurance Associates, Inc. and we will discuss your operation, assist you in completing the insurance application, and obtain a quote for Commercial Equine Liability Insurance for your equine operation.

What limit of liability is adequate? Choosing liability limits is something only you can decide. Some factors to consider are 1) The amount of your net worth,

2) Knowing the largest judgment ever awarded in your county for a civil suit. 3) Understanding how your state laws protect you such as is there a cap on judgments in your state. Equine Personal Horse Owners and Commercial Equine Liability Policies can be written with limits of $1,000,000 per occurrence and a $2,000,000 annual aggregate limit. Umbrella policies may also be available to provide higher limits of liability.

As you think about your horses and horse operation, considering liability insurance is essential. Your hard work over your life which enables you to enjoy the pleasures of owning a horse should not be left unprotected by an unforeseen incident resulting in legal action against you caused by one of your horses.

Smith-Embry Insurance Associates, Inc. Insurance Offered:

3044 Breckenridge Lane, Suite LL1 Commercial Equine Liability

Louisville, KY 40220 Equine Personal Liability

Phone: (502) 493-9911 Farm Property Package

Fax: (502) 493-0070 Care, Custody & Control

Email: basmith@insurehorses.com Horse Mortality & Theft

Website: www.insurehorses.com Horse Major Medical/Surgical

Horse Club & Event Liability