Equine Law Blog

Common Myths Regarding Equine Insurance - Part 1 of 3

When it comes to equine-related insurance, myths and misconceptions have plagued the horse industry for years.  People fail to read their policies and instead rely on myths, making costly mistakes.  Coverage may be denied because they failed to comply with an important policy condition.  Or, in some cases, people learn that the policy they bought offers no coverage for the problem at hand.

This series will explore 15 of the most common myths surrounding equine-related insurance.  Here are the first 5:

1) “I No Longer Need Liability Insurance Since My State Has Passed an Equine Activity Liability Law.”

As of January 2012, 46 states (all but California, New York, Maryland, and Nevada) have passed laws designed to, in some way, limit or control liabilities in horse activities.  All differ.  None ends liability altogether, and not every incident triggers an equine activity liability law.  The need for insurance remains.

2) “I Don't Need Insurance Because I Make Everyone Sign a Waiver of Liability.”

People who sign these documents sometimes sue.  The success or failure of their lawsuits depends on:

• whether the applicable state’s law enforces waivers/releases;
• whether the document was properly drafted; and
• whether the document was properly signed.

3) “My Homeowner’s Insurance Policy Covers All Liabilities Arising From My Horse-Related Business Activities.”

Standard homeowner’s insurance policies are not business insurance.  These policies almost always exclude coverage if someone is injured in connection with a “business pursuit.”  Equine activities, such as lessons, boarding, or training, could qualify.  By comparison, a commercial general liability insurance is designed to cover business risks.

4) “My Umbrella Policy Covers My Horse-Related Business Activities.”

If your existing insurance policy does not cover “business pursuits,” your umbrella policy might not, either.  Umbrella policies typically increase your policy limits on some or all of your existing insurance.  If you believe that your policy offers coverage for risks beyond your homeowner's insurance, confirm this in writing with your agent or insurance company.

5) “My Horse Got Sick and Had to Be Put Down.  Now I Can Call the Mortality Insurance Company.”

Most mortality insurance policies require “immediate” or “prompt” notice of an insured horse’s injury, lameness, or illness.  Those who fail to comply with these notice requirements risk losing coverage.  Because notice requirements can vary from company to company, read your policy carefully.

Conclusion

Don’t fall prey to myths.  Make sure you are protected.

Categories: Insurance, Liability