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“A new law enacted in 2005 for all Pennsylvania equine farm operators and owners now protects such persons from lawsuits. This is an incredible protection from frivolous lawsuits. Click hear to read the entire law. In order to be protected parties must follow certain requirements such as posting rules and using certain language within your contracts. Print out the law and discuss this with your lawyer.”

 

 

Farm Insurance Frequenty Asked Questions (FAQ's)

Q. Why do I need commercial liability insurance when all I do is board a couple of horses to offset the cost of taxes and expenses of my home, I really don’t profit anything from this?

A. Your homeowners or similar personal liability insurance is very clear on what it covers and what it doesn’t cover. Most homeowner’s policies specifically exclude all business activities whether or not a profit is made. Therefore no liability coverage would be provided even if this was just to offset the cost of taxes.

Q. Ok, I will buy liability insurance but do not want to replace my existing homeowner’s policy?

A. As long as you are aware what you are covered for this would be fine. A homeowner’s policy covers outbuildings (stables and barns) as long as these buildings are not being used in anyway for a business. A liability only policy does not provide coverage on buildings. If you can retain or self insure losses to your outbuildings then it would be fine to buy a separate liability only policy and keep your homeowners. However if your outbuildings are high value and you cannot retain a loss to them then you would have to replace your homeowners policy with a farmowner’s policy which will provide both coverage on your personal residence, farm outbuildings and business liability.

Q. Can I be sued if I allow people to ride their horses on my property?

A. Most jurisdictions hold the landowner responsible for whatever occurs on their property. Although there are different degrees of negligence, ownership of land usually starts the negligence scale.

Q. Do I really need care custody and control coverage when I have all my boarders sign a release AND most of them already have mortality coverage on those horses?

A. This is an optional coverage; however as a boarding stable you are ultimately responsible for loss to someone else’s horse in your care. General liability policies exclude damage to property owned by you and property of others in your care. Even though you have them sign releases does not mean they can’t pursue damages in a court. Care custody and control would pay for the cost of the lawsuit as well as any damages awarded. If your boarders have their horses insured; all the more reason you want this coverage. In this case if damage occurs you can be assured the insurance company will try to recoup their loss by seeking reimbursement for you.

Q. I am an independent instructor (or trainer). I work only at other people’s farms. Won’t their insurance cover me?

A. This depends. Typically if you are an independent and not an employee of that farm their insurance policy will NOT provide coverage to you. As an independent you would not fall under the definition of an insured under their liability insurance policy. Some insurance companies offer their clients to add independents on as additional insured for a nominal fee. However coverage is usually limited to operations for that farm and nothing else. I always advise my clients to purchase their own liability insurance in lieu of being added to someone else’s policy. There are several benefits to this, the best being that you are in control of your own insurance. If you rely on another’s policy for your only protection you could encounter several problems. What happens if that farm has a claim that used all their insurance for that year? Where would your coverage come from? What if that farm canceled, non-renewed or was canceled for non-payment of premium. Where would your coverage be?  Always try to have your own coverage if you are operating your own business.

Q. What should I look for when selecting an insurance company and agent?

A. Sometimes your local agents might not have experience insuring horse farms. Most local agents and companies focus on personal auto, home and small business. They don’t have the experience or expertise to advise clients with horse exposures. Furthermore without a large client base of farms most farm insurance companies would not allow these agents to place business with them. These agents would have to seek help or broker this business to agents that have the expertise and access to farm insurance companies. The problem lies in the potential gaps of coverage that can arise when an agent does not understand the unique nature of your business. Always ask questions about the coverage being offered, the financial stability of the insurance company, how many horse farm accounts that agent currently services and whether or not this business is being brokered. If at all possible try to buy your insurance from an agent that represents the company and is NOT brokering the business to another agent. Just because the business is being brokered does not make it a bad thing, sometimes our office has to broker business but only when absolutely necessary.

 

 

 

 

 

 

 

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