ELITE ADVISOR BEST PRACTICES
Reining in Equine Risk
Insurance considerations for horse owners: Five key questions to ask
By Gina Teresi
- Many high-net-worth families have a passion for horses that extends into their daily lifestyles.
- Standard home and umbrella insurance policies typically won’t offer suitable protection for horse owners.
- Connecting with insurance professionals who understand the nuances of horse ownership can help your clients secure the best possible protection as they pursue their life passions.
For many, owning a horse is the realization of a lifelong passion. Unfortunately, it also can increase your clients’ chances of incurring financial losses or lawsuits. Without adequate insurance coverage, an uninsured loss related to horse ownership could erode clients’ personal savings or thwart their estate or investment plans.
If you advise high-net-worth clients, it’s likely that you’ve come across families whose lifestyles revolve around the equine world. Some travel for weeks at a time while they or their children compete in equestrian events. Others ride at home, just for pleasure. There are many different ownership scenarios—some board horses on their properties, while others board at a professional facility—and the insurance needs vary from case to case.
You don’t need to be an insurance expert to help your clients reduce their exposure to costly losses or property damage resulting from horse ownership. But opening clients’ eyes to the potential risks of their equine pursuits is a meaningful first step. From there, it is best to consult with an independent insurance advisor who specializes in risk management for people with substantial wealth.
Following are five questions to help you initiate discussions:
1. Do you have clear proof of coverage on your policies?
Many owners assume their horses have coverage under their homeowners policies, but limitations or exclusions are common. That is not something anyone wants to learn after a claim is denied.
2. How does the manner in which you purchased your horse affect your coverage?
If the horse was purchased under an entity’s name, such as an LLC or LLP, the homeowners or personal liability policies most likely do not extend coverage to that entity. Therefore, any damages or injuries caused by the horse could be excluded from insurance protection.
3. Are other horses boarded on your personal property?
Some insurance providers consider horses kept on one’s personal property (for a fee) to be an incidental business, which means coverage may be limited or excluded.
4. Do you need workers’ compensation insurance?
State employment laws often require a person to carry workers’ compensation insurance if he or she employs full- or part-time help around the barn. A homeowners policy may exclude coverage in the event that a worker is injured on your property.
5. Do you or other family members ride, show or compete off property?
If so, some or all of those activities may not be fully covered by a basic insurance policy.
Available insurance solutions
The risks related to horse ownership cannot always be adequately addressed on a single policy, so your clients should consider insurance carriers that can provide a suite of policies with the features needed to address their unique lifestyle and needs. Some of the key points to look for when weighing traditional policies and supplemental insurance include:
Equine liability. Look for worldwide liability coverage of bodily injury and property damage that’s caused by owned or leased horses. This feature can keep your clients protected no matter where they board, ride or compete with their horses.
Equine mortality and medical coverage. This coverage can reimburse clients for veterinary expenses incurred from their horse’s injury, illness or death.
Homeowners. If you have clients who keep horses on their properties, their homeowners policies should provide broad coverage for private barns, fencing, outbuildings and equipment.
Automobile. If a personal vehicle or horse trailer breaks down, your clients will want a policy that provides access to roadside assistance and towing for their vehicles and trailers.
Travel and accident. If clients travel the country (or the world) with horses, make sure they obtain coverage in the event of trip interruption, cancellation, illness, injury or medical evacuation.
Collectibles. Private collections insurance can protect virtually anything—from sporting art of treasured animals to trophy collections.
Farm and ranch. If your clients’ equine passion is more commercial than hobby in nature, there are designated coverages to address the related risks.
In addition to the substantial financial and time commitments associated with horse ownership, there is usually a strong emotional component. By taking the time to learn more about your clients’ lifestyles and how to protect them from risks associated with their life passions, you can reinforce your role as a critical advisor.