While passion and deep industry knowledge often fuel the operations of equine businesses—such as boarding stables, riding schools, and equine event venues—a healthy dose of intentional and strategic risk management is crucial to their well-being.
For these businesses, insurance is one of those risk management tools that plays a critical role in protecting business assets, safeguarding against liability, and facilitating continuity of business operations in the event of loss or litigation.
Working closely with qualified insurance brokers and legal counsel can help equine business owners maximize their return on investment where insurance is concerned. Legal professionals can evaluate existing insurance policies to identify existing and potential gaps in coverage and advise on contract language that aligns with applicable laws and insurance requirements and the business's overall risk management needs. Below are key considerations when evaluating insurance coverage for horse boarding operations or when organizing equine events.
1. Tailor Coverage to Business Activities and Risk Exposure
No two equine operations are identical. A stable that offers boarding and riding lessons carries different liability exposures than a facility that hosts competitive events. Insurance coverage should be structured around the specific activities conducted by the business and on its premises.
A legal risk assessment can help identify potential liabilities that may be excluded from general or equine-specific policies. For instance, allowing outside trainers, leasing horses, or operating on leased land may present risks not covered under standard policies.
2. General Liability Insurance Often Requires Equine-Specific Endorsements
Commercial General Liability (CGL) insurance is a foundational policy for any business. However, many CGL policies explicitly exclude liability for horse-related injuries or incidents unless supplemented with an equine liability endorsement.
Equine-specific liability insurance is essential for operations that involve interaction with horses. These policies typically provide coverage for injuries or property damage resulting from horse-related activities. For those hosting horse shows, clinics, or other public events, Special Event Liability Insurance may also be required to cover risks associated with spectators, vendors, or temporary infrastructure.
Legal review of policy terms, exclusions, and endorsements can ensure that insurance coverage is aligned with the actual risk profile of the business.
3. Care, Custody, and Control (CCC) Coverage Is Essential for Boarding Operations
Boarding facilities that care for horses owned by others should obtain Care, Custody, and Control (CCC) insurance. This coverage protects against claims arising from injury, illness, or death of non-owned horses while under the business’s care.
Standard liability policies typically exclude personal property in the insured’s custody, making CCC coverage a necessary addition. Legal counsel can help evaluate whether per-horse and per-occurrence limits align with the business's needs and risk tolerance and whether boarding agreement language aligns with the scope of this coverage.
4. Property and Equipment Coverage Must Reflect Commercial Use
Facilities that operate as commercial equine businesses should ensure that barns, arenas, fencing, tack, and equipment are covered under a business property insurance policy—not a personal or homeowner’s policy. Many homeowners’ policies exclude claims related to commercial activities.
5. Workers' Compensation and Volunteer Coverage
North Carolina mandates Workers’ Compensation Insurance for businesses with employees, including grooms, barn managers, or instructors. Given the physical demands of equine work, this coverage is essential for both compliance and protection from personal injury claims.
Qualified businesses relying on unpaid volunteers should consider Volunteer Accident Coverage, which may help mitigate exposure to liability for injuries sustained during volunteer activities. Legal advice can help determine employment classification and compliance with wage and labor laws, particularly in distinguishing between employees and independent contractors.
6. Professional Liability and Errors & Omissions (E&O) Insurance
Equine professionals who offer instruction, training, consulting, or horse appraisals may face liability not covered by general or commercial liability policies. Professional Liability Insurance (also known as Errors & Omissions insurance) protects against claims alleging professional negligence, misrepresentation, or failure to deliver promised services.
Attorneys familiar with equine operations can review the scope of services provided and determine whether professional liability insurance is necessary to address potential exposures and can advise on key mechanical differences with respect to how E&O policies operate from how other policies like CGL policies operate and the significance of those differences when navigating a claim.
7. Use Enforceable Contracts and Waivers
Insurance is only part of a comprehensive liability strategy. Well-drafted contracts—including boarding agreements, liability waivers, and event participation releases—are critical tools in managing risk and demonstrating due diligence.
When operating as an equine business in North Carolina, these documents should be reviewed by North Carolina legal counsel to ensure compliance with applicable state laws, especially equine activity liability statutes. Improperly drafted or unenforceable waivers may be ineffective in protecting against litigation.
8. Periodic Legal Review of Insurance Policies
As equine businesses expand or diversify their services, insurance coverage must be updated to reflect new risks. Hosting additional events, leasing horses, or purchasing property can affect existing policies and trigger the need for new coverage.
Periodic legal reviews of insurance policies can help North Carolina equine business owners stay informed about policy changes, better understand the insurance products purchased, and ensure coordination between insurance coverage and contractual obligations.
Final Thoughts
Equine businesses operate in a high-risk environment where injuries, accidents, and property damage can result in significant legal and financial consequences. While insurance is an indispensable part of risk management, coverage must be tailored to the specific activities and liabilities of the business to best serve its intended function and maximize the business's return on its investment in insurance.
Engaging legal counsel to assess insurance policies and business practices can help identify gaps, clarify responsibilities, and strengthen overall protection. A proactive approach to legal and insurance planning can provide North Carolina equine business owners with greater confidence and long-term stability.
At Ward and Smith, our Equine and Insurance Law attorneys work together to provide legal support tailored to equine businesses. We help clients manage liability, insurance coverage, and regulatory compliance, offering guidance on risk management, contracts, and insurance policies. To learn more, visit our Equine Law and Insurance Counseling and Recovery practice pages.
