Does my homeowners insurance cover incidental boarding? I’m only keeping one or two horses for a friend or family member. This is one of the most frequently-asked questions that we receive. All too often, the answer to this question is learned too late. This article describes several claim scenarios and explains how the typical homeowners may or may not respond, and why. It also includes an easy, low cost solution to the shortcomings of homeowners insurance.
Exposures & Claim Scenarios
There are numerous exposures that exist when caring for non-owned horses.
- The nonowned horse may injure itself or damage property that belongs to someone else. This might happen if it were to escape from its pasture and be struck by a passing car.
- A third party may also be injured by a nonowned horse in your care. Referring to the example above, the driver or occupants of the car which strikes that horse on the road may easily be injured or killed in the accident, resulting in an expensive bodily injury lawsuit.
- Conditions at premises where nonowned horses are kept or ridden may cause bodily injury to a rider or third party. A boarded horse may trip or stumble over soft or loose terrain, causing a rider to fall and become injured.
- Finally, the horse may be injured or killed as a result of the care it receives (or didn’t receive). Moldy hay or a lack of enough fresh water to drink might cause a horse to colic and possibly die if prompt medical care isn’t provided.
Little To No Protection
Will your homeowner’s policy adequately protect you in the event of a claim involving a horse you’re caring for? The short answer is “probably not”. There are a couple of reasons why incidental boarding isn’t likely covered by your homeowners insurance, or if coverage does exist, it would only provide a minimal amount of protection.
Business Pursuits Exclusion
The liability coverage afforded under a homeowner’s policy is intended to protect an individual and his or her family members for activities and exposures one would typically have as an “individual”. Whether it’s a baseball that was accidentally thrown through a neighbor’s window or a visitor slipping on ice-covered stairs that weren’t cleared in anticipation of visitors, the homeowners policy is there to respond. However, these policies exclude coverage for liability arising out of the “Business Pursuits” of an insured. Business pursuits are commonly defined as a “continual or recurrent activity carried out for financial gain”. For this reason, the fact that a fee is charged in exchange for care would prevent your homeowner’s policy from protecting you in the event of a claim.
Damage to Property of Others
What if you’re just keeping your friend’s horse as a favor, with no fee charged? This is another area where your homeowners insurance might still let you down. Many popular homeowners policies include up to $1,000 of protection for damage to property of others caused by an insured. Others may include a smaller amount of protection or exclude it entirely. At claim time though, $1,000 isn’t much coverage considering the price of horses and the cost of veterinary care these days. Also, all of these policies exclude claims arising from business activities, as mentioned above.
The Solution!
Obtaining the proper liability protection is essential for anyone who is planning to board horses that don’t belong to them. Not only should it include adequate protection for Bodily Injury and Property Damage, it should also be properly endorsed to include coverage for injury or death to non-owned horses in the Care, Custody or Control of the insured. The cost of a policy which includes these essential protections starts out around $500 – $600 per year. In addition to a relatively small premium cost, many insurance companies offer low-cost installment options, which make it possible to cash-flow your premiums in conjunction with your boarding income. Finally, obtaining a quote and purchasing the coverage is quick and easy. In some cases may even be completed all in one day, although it generally takes a little longer.
When considering this post, please keep in mind that no two scenarios are identical. This is just a general overview of some of the risks associated with relying on homeowners insurance to cover your boarding exposures. For coverage advice, please consult directly with an Equine Insurance Specialists representative. You may reach us at (800) 723-9414 or by email at info@insureyourhorse.com. Visit us online at insureyourhorse.com and on Facebook.