In Canada, selling and leasing horses is a commercial venture where you stand to profit, which means you open yourself up to liability exposure. We can’t always predict how horses are going to behave in any situation, so you want to make sure that you protect yourself and your business.
In fact, even if you don’t deal directly with horses and instead sell items that will be used in relation to a horse, you still need some liability exposure.
What you’ll discover in this report:
- Potential exposure when you’re selling a horse
- What to know about leasing horses
- Common claims related to horse sales and leasing
- The need for horse tack and equipment sales insurance
- Common claims against horse tack and equipment businesses
- How to plan ahead
- Coverage offered by a commercial general liability policy
- Other types of insurance to consider
Am I Really Exposed if I’m Selling My Horse?
We’ve all made purchases we’re not happy with. It can happen when someone purchases a horse, too. Buyers always have expectations, and if the horse you sell them doesn’t meet their expectations, you could get pulled into a claim.
How? Because someone gets hurt or property is damaged by the horse you sold.
Whenever someone interacts with a horse in any way, you’re exposed to liability. If you’re selling or leasing a horse or horses each year, you may not need horse sales and leasing insurance. But if you’re raising a large number of horses and buying and selling more than a couple horses a year, you need commercial liability.
What Do I Need To Know About Leasing Horses?
No matter the term of the lease, owners must prepare a lease agreement that includes how the horse is to be used. Some of your liability is relieved if you own the horse when you pass it off to the lessee, but you want to make sure the lessee is properly insured. And if the lessee has employees that will be exposed to the horse, you want to make sure the staff is insured under a workers compensation policy.
All parties should sign an agreement clearly indicating the terms and responsibilities of everyone involved. Some of the items mentioned should include:
- Term of the lease
- Residence of the horse during the lease
- Purpose of use
- Conditions of premises
- Level of care
- Use and misuse
- Who pays for any expenses, including food, vet and farrier
- Return of the horse
- Future sale of the horse
- Ownership of major medical insurance
- Limits of liability insurance of lessee
A short-term lease may only last a day or a few weeks. Generally, the purpose of a short-term lease is riding, and some owners lease their horses seasonally to schools, camps or resorts.
A long-term lease can last anywhere for 90 days to many years. In most cases, people use long-term leases to try out horse ownership. It could also be for breeding or competition. In many cases, owners include an option to buy the horse in a long-term lease.
Top Claims Related to Horse Sales and Leases
The most common claim incidents involving horse sales and leases include:
- The horse is injured or dies while in the trainer’s custody or control
- A horse gets loose at a show and causes a car accident. Any injuries to passengers and damage to the car can result in a large claim, and the horse must usually be put down.
- Bystanders or other horses are injured and/or property is damaged while a horse acts unpredictably in the trainer’s care.
Why Do I Need To Insure My Horse Tack and Equipment Sales?
You should insure your tack and equipment sales because you could be pulled into a claim or lawsuit, which can financially harm your business. Other reasons to purchase coverage include:
- If you sell commercially manufactured products, you can still be named in a lawsuit.
- If you manufacture items for sale, this isn’t generally insured under your farmowners Insurance. This could include large items pulled by the horse like a horse, or something the horse wears like a saddle.
- Because operating a retail store brings with people coming in and out of your store.
Top Claims Related To Horse Tack and Equipment Sales
The most common claim incidents involving tack and equipment sales include:
- A customer gets hurt while entering or exiting your store and makes a bodily injury claim.
- The equipment you sell malfunctions and causes an injury to your customer or a member of their family.
- Someone is injured while using an item they bought from you.
How To Plan Ahead
We know you care about the horses and the people who come to you for services. Below are steps you can take to protect yourself against potential accidents.
Have clear store rules
Develop rules for your environment for staff and clients. Train staff members so they understand rules and procedures. Document procedures.
Plan for emergencies
Emergencies happen. But the more prepared you are, the better chance you have of providing proper care to your horses. Preparation can minimize the severity of any accident.
Develop regular inspections of your property
By inspecting your premises for potential hazards, you can take care of them before an incident occurs.
Review your province’s Occupiers’ Liability Act
Your province's Occupiers’ Liability Act could state that the store owner/operator owes a duty of care to the people who enter their premises, which assures that any property they bring on your premises is also reasonably safe.
Purchase a commercial liability insurance policy
Protect you and your business with an insurance company that knows horses and your business. You want to make sure that any legal fees are covered, claim costs and settlements to ensure that in the case of an accident, your business doesn’t suffer a financial loss.
What’s Included in the Commercial General Liability Policy?
This policy protects you from legal costs, claims and settlements from a prospect, buyer, lessee, lessee’s guest, visitor or anyone who visits your business property, invited or not. It includes:
- Bodily injury: Protect yourself from financial loss in the event anyone sustains an injury on your property.
- Property damage: Avoid having to pay damages to others if an incident occurs on your property in relation to your business activities.
The policy gives you maximum limits or amounts of liability insurance for:
- Lawsuits for bodily injury or property damage caused by conducting your business operations .
- Legal defense costs: You can save your business the financial burden of court costs if you’re sued, whether or not the case has merit.
- Claims or settlement costs: Without this policy, the business could be held responsible for bodily injury and property damage claims.
Other Coverages To Consider
In addition to commercial general liability insurance, you should also consider tack, equipment and machinery coverage to protect your tools and your business by insuring your tack, equipment and machinery against loss or damage.
If you are manufacturing items, you should also ensure you have a Products Liability policy, should you be sued due to defective equipment or tack.
Get Horse Sales, Leasing and Equine Equipment Insurance Today
At Henry Equestrian, Powered by NFP, we understand horses and we want to help protect your business. Contact us today to learn more or click below for a free, no-obligation quote.