Coverage At What Cost?

First, consider the essentials. Most stable-related policies “include personal and farm liability,” says Linda Liestman, president of Ark Agency Animal Insurance Services. Often, stables add a commercial liability policy for horse-related activities. Liestman’s list of 125 such activities includes boarding, breeding, training, lessons, camps, pony rides, horse rentals and horse-drawn vehicle rides.

One way to make sure you’re not paying more than necessary: “Ask a company or agent for a breakdown of costs on the various activities requiring insurance,” Liestman says. “Then evaluate insurance costs versus income and future potential. Perhaps cut out an exposure or activity and save premium dollars.” Perhaps it’s time to re-evaluate what you really want to do in the horse business.

Get Full Credit

Credits are another way to cut insurance costs. “We don’t have ‘discounts’ per se,” says Scott A. Newbury, VP Marketing at Travelers Agribusiness, about the insurance business. However, he adds, “We provide a number of different credits for well-maintained and -managed operations.”

Credits—reduced premiums—are allowed by most property and casualty insurance programs. Programs vary from state to state, but most insurers in most states allow credits for a safe operating history, such as a clean safety record and a favorable loss ratio over the previous three-year period. Safety features such as fire protection devices—sprinklers and alarms, etc.—may qualify for a credit, as may certification of professionals, continuing education and long-term industry experience. Be sure to ask your insurance agent about these.

Insurance rates vary between states, and between insurers. State laws affect rates and credits in most instances, and minimum premiums may apply that don’t allow for crediting. However, press for whatever credits you have earned. A quotation will usually provide a 10% to 25% credit depending upon the premium amount and the factors described above. Ask an agent how credits may reduce your premium, Liestman advises, and whether they’re being applied to your policy.

Deductibles may reduce premiums, as can insurance limits that set the maximum amount of a judgment payable under the contract. Be sure you understand the risks and benefits—your decision must balance your ability to pay the premium against the likelihood of a claim. Would the higher premium squeeze your operation? Are you comfortable that you won’t need to pay the deductible, or that you can afford to do so if necessary? Would an upper limit on a potential claim make it harder to sleep at night? These are some of the tradeoffs to consider.

Having a clean risk profile, and therefore qualifying for credits, reinforces the importance of running a shipshape operation. You can earn credits for having an exceptionally new or very well-maintained facility and trails; the type, design and condition of your fences; new or recently remodeled buildings; up-to-date wiring; tack room neatness; maintaining tack, equipment and horses in excellent condition; and for instituting a risk-reduction procedures manual with a strict safety program.