Legal Questions and Answers for the Horse Community

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Rachel Kosmal McCart
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Insurance for Leased Horse?

Q: My 18-yr old daughter passionately wants to lease a horse owned by an individual and boarded at a commercial stable. She is being asked to sign what appears to be a generic contract with the lessor insurance paragraph crossed out and initialed by the owner. However, the owner has handwritten in that she is responsible for vet bills if the horse in injured while she is riding him, and specifying a $15,000 amount to be paid the owner if the horse has to be put down. I am uneasy about her leasing a horse without being insured. Am I justified? (She thinks I'm making a big deal out of nothing.) If so, what kind of coverage is suitable for the lessor? Sincerely, Mean Old Mom

A: Of course, I haven't seen your proposed lease agreement, but it does appear to assign financial responsibility to your daughter if the horse is injured or dies while he is in her care. (Believe it or not, Ive seen many lease agreements that dont even mention what happens if the horse goes lame, colics, etc. during the lease term!) Because you and your daughter have some financial risk here and the horse is worth a substantial amount of money, you may want to consider obtaining insurance on the horse. With horses, as many of us know all too well, we should expect the unexpected!

Now, what type of insurance to buy? Id recommend mortality insurance in an amount that reflects the horse's full fair market value as well as major medical insurance that would cover colic surgery. The horse's owner may wish to be named as an additional beneficiary on the policy. For further tips on buying equine insurances, see the Insurance?page of the Equine Legal Solutions website, where we have posted a guide to shopping for equine insurance.

Finally, who should pay for the insurance ?you or the horse owner? In partial lease situations, there is seemingly no convention regarding who pays for insurance. Sometimes the horse owner pays, sometimes the lessee pays and sometimes, they split the cost. With valuable horses, the owner often has existing insurance on the horse and will build that expense into the lease price. With full leases, especially in situations where the horse is kept on the lessee's property, the lessee often pays for the full cost of insurance.

About the Author: Rachel Kosmal McCart, the founder of Equine Legal Solutions, is a lifelong horsewoman and experienced lawyer. Equine Legal Solutions, the Legal Counsel with Horse Sense TM , offers a full range of legal services for the horse community, including dispute resolution, customized contracts and risk management assessment.
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