What You Didn't Know About Liability Insurance
Every year you write the check to your insurance agent, fully expecting that you're covered for liabilities arising from your horse-related activities. But what if a claim or lawsuit is brought against you, and, to your surprise, you discover that you’re not covered for it?
Here are some equine liability insurance coverage surprises that people have experienced over the years. With careful planning, you can make sure that they never happen to you.
Most businesses in the equine industry are small businesses. For example, some people give riding lessons on weekends to earn a few extra dollars, and barn owners sometimes board a small number of horses to help fill stalls and pay the bills. These business operators might assume that the small scale of their activities makes business insurance unnecessary, and they might further assume that their standard homeowner’s liability insurance coverage will extend to their business activities. Nothing could be farther from the truth.
Homeowner's insurance is not business insurance. In fact, homeowner’s insurance policies almost always exclude coverage when someone is injured in connection with a “business pursuit.” By comparison, commercial general liability insurance policies and equine professional insurance policies are designed to cover business-related risks. Small business owners can discuss appropriate business-related coverage with their insurance agents.
Injuries to Horses in Your Care, Custody, or Control
Even if a boarding stable protects itself by purchasing commercial general liability insurance, it might still be uninsured against a foreseeable risk – the risk of a horse becoming injured (or worse) at the stable. Why? Liability insurance policies typically exclude coverage for claims involving damage to or loss of personal property belonging to others in the stable’s care, custody, or control. In the eyes of the law, horses qualify as “personal property.”
By comparison, equine insurance companies offer extra insurance to fill this coverage gap. For additional cost (depending on the type and extent of coverage you buy), insurers will sell specialized coverage commonly known as a “care, custody, or control” endorsement to add to a stable’s existing commercial liability insurance policy. This endorsement offers coverage for claims against the stable involving injury or damage to boarded horses.
Coverage for Injured Workers
For equine business operators who have employees, commercial general liability insurance is rarely enough, especially because these policies often have "employee exclusions," which prevent coverage for claims brought by injured employees.
Equine business operators too often jump to conclusions and wrongly assume that their workers are "independent contractors," not employees, and that that they need no worker’s compensation insurance. That can be a costly mistake. As a matter of law, "independent contractors" might very well be employees, and the equine business could find itself with no coverage against an injured worker’s claim. Make no assumptions; secure knowledgeable advice based on your situation. In the past, this blog has discussed liabilities involving "independent contractors."
This article does not constitute legal advice. Please remember that the rights of an insurance company and its policyholders vary and depending on the policy and the law. When questions arise based on specific situations, direct them to a knowledgeable insurance agent or attorney.
Julie Fershtman is considered to be one of the nation's leading attorneys in the field of equine law. A frequent author and speaker on legal issues, she has written over 400 published articles, three books, and has lectured at seminars, conventions, and conferences in 29 states on issues involving law, liability, risk management, and insurance. For more information, please also visit www.fershtmanlaw.com and www.equinelaw.net, and www.equinelaw.info.View All Posts by Author ›
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Julie Fershtman, author of our popular and prolific Equine Law Blog, was interviewed by the State Bar of Michigan. The interview, which called Fershtman "Lawyer-Blogger," discussed our Equine Law Blog. We truly believe that this blog is the nation's most active blog serving the equine industry on equine law topics, and we thank you for visiting it. Read more here.
Honors & Recognitions
Equine lawyer, Julie Fershtman, has recieved these prestigious equine industry awards from respected equine organizations:
"Excellence in the Advancement of Animal Law Award" - American Bar Association Tort Trial & Insurance Law Section Animal Law Committee
"Distinguished Service Award" - American Youth Horse Council
"Industry Service Award" - Michigan Equine Partnership
"Catalyst Award"- Michigan Horse Council
"Outstanding Achievement Award" - American Riding Instructors Association
"Partner in Safety Award" - American Riding Instructors Association
"Associate Service Award" - United Professional Horseman's Association
"National Partnership in Safety" Award" - Certified Horsemanship Association
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Handling breach of contract, fraud/ misrepresentation, commercial code, and other claims involving equine-related transactions including purchases/sales, leases, mare leases/foal transfers, and partnerships.
Litigating disputes in court or through alternative dispute resolution (arbitration, mediation, facilitation).
Defending equine/farm/equestrian industry professionals, businesses, and associations in personal injury claims and lawsuits.
Drafting and negotiating contracts for boarding, training, sales, waivers/releases, leases, and numerous other equine-related transactions.
Representing and advising insurers on coverage and policy language as well as litigation;
Advising equine industry clubs and associations regarding management, rules, bylaws, disputes, and regulations.
Representing some of the equine industry's top trainers, competitors, stables, and associations.
Counseling industry professionals, stable managers, and individual horse owners.
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Did you know Julie Fershtman has spoken at the American Horse Council Annual Meeting, Equine Affaire, Midwest Horse Fair, Equitana USA, US Dressage Federation Annual Meeting, North American Riding for the Handicapped (now PATH International) Annual Meeting, American Morgan Horse Association Annual Meeting, American Paint Horse Association Annual Meeting, US Pony Clubs, Inc.'s Annual Meeting, All-American Quarter Horse Congress, American Youth Horse Council Annual Meeting, American Riding Instructors Association Annual Meeting, CHA Annual Meeting, and numerous others? Consider signing her up for your convention. Contact Julie.
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