Whether you own one broodmare or a large herd, stand one stallion or have an extensive breeding operation, at some point in time you’ve probably asked yourself: what would happen if something happened to my horse, or someone else’s horse that is on my farm to be bred?
Horse owners know that the odds of a horse being injured or becoming ill seem to be directly proportional to both the financial value of the horse and the emotional investment you have in the animal. There are many options available to help you to protect your financial investment in your horses, your breeding program and facilities, and that, in turn, can lessen some of the emotional burden.
But first, you need to ask yourself just exactly how risk-averse you are. Do you want to protect yourself from any and all possibilities, or only the most potentially catastrophic outcomes? What can you afford to pay? How does the cost of insurance compare to the investment you’ve made in your breeding program including the horses, their care, veterinary expenses, stud fees, etc.? And lastly, should you opt to self-insure some or all of the risk, what can you afford to lose?
ASSESSING VALUE
Because insurance is a contract between the insured (horse or farm owner) and the insurer (insurance company), the obligations of both parties must be clearly defined in the policy. Michael King of Intercity Insurance Services Inc., explained that while the point of insurance is to protect the horse owner from specific financial loss, it is important for the owner and the insurance company to agree, in advance, to the value of the animal(s) to be insured and under what circumstances the owner will be reimbursed should something happen to the horse.
“We work hard with owners to realistically assess the value of each animal and, as a result, this keeps insurance costs proportionate to risk,” King said. “The insurance company has no interest in taking premiums based on unrealistic or inaccurate values. Until an animal is a proven performance horse, there is not necessarily a direct correlation between the owner’s costs of raising and training the animal to the fair market value of the horse. We revisit the value with the owner periodically as circumstances change – typically on a scheduled annual review.”
As a horse’s career takes off, its value may increase. But, at some point in time, as the horse ages and its performance ability decreases, so does its fair market value. The same is true of breeding stock. King said, “The pedigree of the horse not with-standing, if a colt is gelded or a mare has never foaled (i.e., is not a proven broodmare), then the value of the horse will be less affected by its lineage than a similar horse that is actively and successfully breeding, for example.”
COVERAGE FOR MARE OWNERS
“Coverage begins with mortality insurance,” said Stephanie Kirton of BFL Canada risk and Insurance Services. She explained that this type of insurance is the foundation for protecting any horse. In addition, she recommends that clients consider adding major medical (including surgical) coverage to the mortality policy. “If something goes wrong during the pregnancy or delivery, you may need emergency veterinary care, or even a caesarian section, which can be very costly.
“The mare owner also should be aware that insurance on the mare is not insurance on the fetus, should anything happen to it or the mare,” Kirton continued. “There is a type of coverage available called Prospective Foal Insurance (PFI) that insures the fetus beginning between the 42nd and 45th day of pregnancy and ending 24 hours to 30 days after birth (details depend on each insurance company’s criteria). This type of policy typically pays out two or three times the value of the stud fee in the event of the loss of the fetus if the mare aborts.”
There are certain conditions that have to be met for this type of policy, including providing a veterinary certificate and ultrasound to confirm that the mare is indeed in foal and that there is only one viable fetus (twins cannot be insured, as statistically their survival rate is poor and it is unlikely any insurer would want to take on the risk). Many stud owners offer a “live foal guarantee” that essentially means if the foal doesn’t stand and nurse, the stud owner will provide a re-breeding for the mare at no additional cost. You should review your breeding contract carefully to understand exactly what your “live foal guarantee” includes. The owner of a broodmare has to balance the cost of PFI insurance against the possible payout should something happen to the fetus to determine if it is cost-effective.
Kirton also explained that there is another coverage available for broodmares called “barrenness” insurance. It is intended to reimburse the broodmare owner if a mare is unable to successfully conceive. It is, however, quite expensive.
COVER AGE FOR STALLION OWNERS
The stallion owner, particularly if providing on-site live breeding, assumes additional risks. Joe Santos of Canadian Livestock Insurance said, “It is important for the stallion owner to consider all of the risks being assumed. He needs to protect his complete operation in addition to the stallion itself, beginning with his liability insurance including the ‘care, custody and control’ of non-owned horses on his property.” The stallion owner’s stableman’s insurance is designed to protect him in the event that something happens to a horse on his property that he doesn’t own himself, such as a mare brought to the farm for breeding.
Santos said that in addition to a full mortality policy, stallion owners have a number of options available to them. Major medical coverage, including surgical coverage, can be added. Another option is Permanent Infertility Insurance. This type of policy covers the possibility that a proven stud becomes infertile due to injury or disease. Or, if a breeder bought a young, unproven stallion as a breeding prospect, it is possible to purchase ‘first season infertility insurance’ in case the prospect turns out to have a low libido (unable to breed a mare) or is proven to be infertile.
In the case of shipped semen (live or frozen), the risk that it will not be delivered in time to be viable is generally covered by the courier company and its insurance, assuming that collection and delivery to the courier has been done in a timely manner.
THE BOTTOM LINE
It is up to horse owners to take reasonable precautions to minimize risks to their horses. Preventive measures such as making sure stabling is safe, clean and adequate for visiting mares and that the owners of the mares provide proof that their animals are healthy, vaccinated and free of disease, go a long way to decrease risk for everyone.
Understanding your policy and what it does,and does not cover, and the circumstances under which it will pay out, is similarly important. If you are not sure what something means, by all means ask. Your insurance agent wants you to understand and wants to work with you to make sure everyone is clear about who is responsible for what.
When you are shopping for insurance, look for an agent who understands and has experience with livestock, horses and breeding insurance. If you are a member of a provincial equestrian association, the national equestrian association, or some breed associations, you may already have some basic coverage, but that coverage alone may not be sufficient if you are entering into a breeding situation.
Having no insurance whatsoever is a huge gamble, and one not many people are willing or able to accept themselves. No one wants to experience emotional upheaval resulting from the injury or loss of a horse and the accompanying financial loss. But, by having the appropriate insurance in place and understanding it fully, you can at least know that you’ve done everything you can to cover your assets.
CARE, CUSTODY & CONTROL SCENARIOS
Care, Custody & Control Liability Insurance provides coverage for the loss of a horse that is in your ‘care, custody or control,’ but is not owned (or leased) by you, such as visiting broodmares, foals, or outside stallions you are standing (also boarders’ horses). Some situations this coverage applies to include:
• a visiting foal escapes from its paddock and is struck by a car on the road. While your general liability policy would cover any damage to the car or injuries to the people inside, your CC&C insurance would cover the loss of the horse.
• while transporting a mare to your farm for breeding, the trailer unhooks and causes an accident in which the horse is injured. Your vehicle collision and liability package will cover the damage to your trailer and any other vehicles involved, and your CC&C insurance will pay for expenses arising from the mare’s injury and rehabilitation.
• an outside stallion you are standing dies as a result of eating a poisonous plant on your property, or an injury sustained in the breeding shed or in the paddock. Even if the problem was one you as the farm owner should have known about and corrected, your CC&C insurance will cover the damages.
