The equine market extends to personal, commercial, and farm/ranch lines of insurance. Risk managers must consider the property value of these animals, including their loss of use and veterinary expenses, as well as the liability exposures they present.

Both admitted and nonadmitted carriers provide this coverage. Travelers, American Bankers, American Reliable, Diamond States, Colorado Casualty, American Equine Insurance Group, Great American, Travelers, Hartford, and Praetorian are just some of the admitted carriers. Various Lloyd’s underwriters provide coverage on a nonadmitted basis.

The wide variety of exposures means that most managing general agents and brokers specialize. Our five experts represent companies with similar but distinct appetites.

Chris Marnitz, president of Marnitz & Associates Insurance, Inc., states that they write consumer-related farm risks for owners, trainers, breeders, boarders and teaching facilities. Jessica Craig, program manager at First Flight Insurance Group, Inc., writes boarding/breeding/training with incidental sales, carriage/sleigh rides, pony rides, riding clubs, riding instructions/lessons, care, custody and control, horse shows, owned pleasure and show horses, private horse liability, and owned race horses not being raced or trained.

Gracie Cunningham, managing underwriter at R.B. Jones writes guided trail rides, pleasure/show horses, parade participation, wagon/sleigh/carriage rides, pony rides, riding instruction and lessons, care, custody and control coverage for horses, riding clubs, incidental horse sales, and horse boarding/breeding/training with incidental farrier coverages, in addition to spectator coverage for rodeos, races, horse shows, and exhibitions.

Brent Allen, president of The Equestrian Group, states that they write farm packages, commercial equine liability, personal horse owners, care, custody and control, bloodstock, equine mortality, and automobile. Mark D. Fredricksen, vice president of Mark D. Fredricksen Insurance Services, says they handle virtually all types of equine and equestrian risks, including every variation of mortality coverage, farm/ranch packages, and liability coverages associated with those exposures.

Losses come from many different areas. Ms. Craig says, “Pony rides, particularly ponies being hand held and that are not on a carousel cause losses in addition to the frequent accidents that take place on trail rides.” Ms. Cunningham is aware of numerous fatalities and says, “The most serious injuries I have encountered occurred at destination [dude] ranches that allow unguided and unmonitored use of their horses.”

Mr. Allen observed that animal collision presents the greatest severity and frequency he has seen. Mr. Fredricksen pointed out, “With respect to severity from the mortality standpoint, we normally see more severe claims during the breeding season because of the risks associated with foaling, such as a breech foal or a foal that doesn’t survive the birth process.”

Our experts all agreed that recommending specific coverage for this class is very difficult because of the many unique features that must be considered. However, Mr. Fredricksen provided this guidance, “Every insured should purchase coverage for any potential loss that would cause a financial drain.” Participant liability is a major exposure our experts pointed out. It is difficult to place but is very important for many insureds. Ms. Craig said that coverage is readily available for guided equine activities, such as trail rides, hayrides, and horse-drawn carriages, as well as for commercial equine activities such as boarding, training, riding clubs, etc.

Gaps in coverage also occur, based on the types of exposures. According to Mr. Marnitz, “Problems arise when an insured fails to purchase care, custody and control coverage for a boarding, breeding or training operation.” Mr. Fredricksen agreed and explained that many facility owners self-insure this particular exposure. However, he believes this creates a significant E&O exposure for the retail agent. When a horse boarded at a facility dies, its owner’s animal mortality carrier pays the loss and then subrogates against the boarding facility. If the facility does not have care, custody and control coverage, the loss is denied, and the retail agent’s E&O becomes a potential source of recovery.

Ms. Cunningham said that property and loss of use coverage for insureds at remote locations can be difficult to purchase and that failure to obtain loss of use coverage is the most significant gap in coverage that she has observed. According to Mr. Allen, “The most common gaps in coverage we find are participant exclusions and designated work exclusions.”

Pricing appears in line with and similar to last year, and is characterized as adequate and affordable with no major changes anticipated.

There are significant geographic concerns for both property and liability exposures but they are not the same concerns. According to Mr. Marnitz, “Coastal states are experiencing some capacity issues as some markets realign their books and pull out of certain states.” Mr. Allen added, “We have experienced difficultly with property risks in Florida, southern Louisiana, Hawaii and Florida because of weather issues.”

Ms. Cunningham finds State Equine Activity Statutes (EAS) to be important considerations when evaluating liability exposures. She explains, “The statutes generally state that someone else can’t be held liable if a person is injured because of an inherent risk associated with the equine activity. Some states’ EAS apply only to injured participants, while others also apply to spectators. Some states specifically exclude protection for injuries to spectators.” However, she is quick to warn that equine businesses should never depend solely on its state's EAS to protect it.

Mr. Fredricksen observed, “Some states, like California, don’t have EAS. In states that do have a law, there is considerable variation in how the law is administered and how well it stands up in court. This presents a challenge to insurance carriers as they await the development of case law on the issues.”

Consult www.fredricksenins.com for information on a specific state EAS.

The horse industry is undergoing constant change and insurance is stepping up to meet the challenge. Equine-assisted psychotherapy is being used with a wide variety of individuals and types of mental health issues, such as victims of domestic violence, veterans with post traumatic stress disorder, and teenagers with eating disorders. Horses are also being used with both children and adults with physical, emotional, and mental limitations. These uses provide many benefits to the participants, but also present risk management challenges that must be addressed.