What should I look for in an insurance agent?
There are many agents out there who offer the coverages you are looking for but they are not all alike. The first thing you should consider is responsiveness. An agent should be able to return your call within one to two days at the most. Sometimes they cannot due to the nature of your inquiry as they want to provide you with a correct answer, but in most cases, they should get back to you promptly. We make every effort to return all phone calls the same day and all emails by the next day even when we are out of the office on appointments.
In the field of equestrian and sports insurance, though, many people think that coverage can be quoted on the spot. Except for mortality coverages, this is generally not the case. Any agent in this field will have to submit your application to its carriers for quotation which can take from 24 hours to two weeks or more depending on the type of coverage. An agent should give you an indication of how long it will take for your quote to be ready at the time he or she takes the application.
The second thing is knowledge of the type of insurance you require, not just from an insurance standpoint, but does the agent really understand what your business is. They may not be able to provide you the best insurance unless they have a good understanding of the risks you are trying to cover. That is why our agency specializes in a particular niche market that we truly understand - Equestrian, Sports & Recreational risks. This allows us to provide you with the best service possible.
The last thing you should ask for is options. Does this agent have different companies through which he or she can insure you? Different insurance companies have different nuances to their various programs and the opportunity to check more than one out is appealing. If they are relying on a single program, ask them why. It may be so great that it really is the best option. We work with several leading insurance companies to provide you with a range of options to customize the best insurance plan for you.
What should I look for in an Insurance company?
There are two things you want to know about the insurance company from whom your quote has come: their A.M. Best rating and are they admitted in your state.
A.M. Best is a national rating service that grades insurance companies on their financial strength and solidity. Ratings range from A++ down and may have a number following them (e.g., XV or 15). The number is a sign of size of the company. To find out an insurance company's rating, you can go to the website for A.M. Best at http://www.ambest.com/ and look up a company's rating. You must know the correct name of the actual insurer as sometimes what you think is the carrier is their holding company. Your agent can provide you with this information. Look for companies with a rating of A- (superior) or better.
An insurance company is considered "admitted" to do business in your state when they have had their books reviewed by and filed their insurance rates with the State Department of Insurance. In the event you have a problem with the insurance company at any time, you would have recourse for remedy through the Department of Insurance. Not so with a non-admitted company. It is preferable to work with an admitted company when you can because of this. You can find out if a particular insurance company is admitted from your agent or from your state's Department of Insurance either via phone or their website. In California's Department of Insurance website, any admitted company you try to look up will be found and information provided about it , but non-admitted ones won't show up.
Sometimes it is right to place coverage with a non-admitted company. It may be that no admitted companies will provide coverage or that the non-admitted company has a special aspect of their program that is different than an admitted carrier and you must have that difference to operate. An agent, however, is prohibited from placing your coverage with a non-admitted company for price alone when an admitted company is available who will provide substantially identical coverage. If your insurance is being placed with a nonadmitted carrier, check that company's A.M. Best rating. If it is A or better, especially if the size number is VII or better, you are probably on good ground. Your agent should be able to explain why he or she is recommending a non-admitted company to your satisfaction at the time your quote is issued.
We work almost exclusively with admitted companies whose ratings are A- or better but we do have some specialty programs available through non-admitted companies for special circumstances. We will be happy to provide you with the rating and admitted status of your company upon request.
What does equine medical insurance cover?
Major Medical insurance is designed to pay for reasonable & customary veterinary expenses necessitated by accident, illness, injury or disease. It is generally governed by exclusions that vary somewhat from one insurance company to another. Exclusions may include but not be limited to: maintenance procedures, vet call and travel charges, transport of the horse for treatment, pre-existing conditions, congenital defects, cosmetic or elective procedures (e.g., castration, Caslicks, etc.), alternative therapies (e.g. chiropractic, acupuncture, etc.), dental, necropsies, horses over the age of 15 or under 30 days, joint treatments (such as Legend, Adequan and joint injections, varies by company) and others that may be company specific. For more specific information, call.
Do I need Worker's Compensation insurance?
In most states, Workers Compensation is a statutory requirement for anyone who employs a person and pays wages over a certain level per year. This applies whether the person works in and around your house or is connected to your business. It is not considered optional by the State Labor or Industrial Relations boards and there are severe penalties for employers who do not have it when an employee goes to report a work related injury or illness. Workers Comp is designed to pay more than just medical bills related to an on the job injury or illness. It also pays a portion of lost wages, rehabilitation expenses, and when necessary, burial expenses. No other insurance will pay for these if they arise from a work related incident.
Some states require you to get insurance through a central bureau, others allow many carriers to offer coverages at either regulated or free market rates. Residential employees can usually be covered under a complete ranch package very inexpensively. Residential employees are those employees whose work is directly connected to the running of the household (e.g., gardener, nanny, maid or housekeeper). All others, including any who care for horses, are considered commercial employees and a separate policy must be obtained.
Be aware that immigration status does not bar a Worker's Comp claim on the part of your employee. That is, if you employee an illegal alien, they are eligible for Workers Comp benefits just like legal residents and you are statutorily required to carry the coverage. We can assist you with obtaining Worker's Comp insurance in California, Nevada and Washington even if you have never had it before.
What is Loss of Use for horses?
Loss of Use is designed to reimburse you a portion of the value of your horse should it become permanently unsound for its stated performance use due to specified causes of loss. One can insure for Full Loss of Use which covers if the unsoundness is caused by accident, illness, injury or disease. Another option some companies offer is Loss of Use due to External Traumatic Accidental Injury Only (External Trauma). Full Loss of Use requires a vet exam, x rays (knees & hocks down), flexions and, with some horses, a drug screen. External Trauma Loss of Use generally has no special vetting requirements above and beyond the basic policy.
The use should be specific as to the level or division of the particular discipline as they will consider that in evaluating any potential claim. Loss of Use can be added to Mortality coverage only if you also take Major Medical coverage. The percentage returned to you in the event of a Loss of Use claim varies from one insurance company to another from 50% to 100% and the horse becomes the property of the company who usually seeks to rehab it and find some use for it thus cutting their loss. If you have a desire to retain the horse, you may usually do so by subtracting a salvage value from the claim payment (evaluated on a case by case basis).
What is Care, Custody & Control and do I really need it?
When a horse is placed into your care & custody, a higher degree of care is presumed by law to be given to that horse than if someone, say, rode their own horse in your arena then left. Because of this higher standard of care, liability policies and packages exclude damage to or death of a horse while it is in your care & custody. A Separate coverage is available to protect you from being held responsible for such damage or death of another's horse - Care, Custody & control, or CCC. It may be written by itself or in conjunction with a liability policy or ranch package. Limits are set on a per horse/per year basis generally starting at $5,000 per horse and going as high as $100,000 per horse or more. To determine what level of coverage is right for you, call us and we will help you.
As for who needs CCC, you do if you are boarding horses, training or exercising horses for others, handling others' horses for breeding or doing incidental hauling of horses. The rule of thumb to use is if you are ever handling a horse belonging to someone else for a fee, you have a Care, Custody and Control exposure. Incidental hauling is when you haul horses for others strictly as a sideline to your main equestrian business such as boarding or training. If you derive over 50% of your income from hauling or if you do not also have another equestrian business, you are probably a professional hauler and CCC will not cover that activity. We can cover professional haulers too.
Why can't I insure my older horse for full coverage?
Mortality insurance coverages are designed to protect you from loss due to the premature demise of your horse. As horses age, the likelihood that they will demise rises. As such, insurance companies each have their own upper limit of age at which they will provide full mortality coverage. Many will offer some type of Limited Perils coverage for over age horses at a low rate which protects only from loss from such things as fire, lightning and other Acts of God, transportation accidents and theft. Under Limited Perils, no medical or surgical coverages are available nor is any type of illness, injury or disease covered unless it is directly caused by one of the listed perils on the policy.
Should we consider fiduciary bonding for our organization?
Every organization or company runs the risk of someone internal to the organization absconding with funds. Various tools can be used to protect your organization from such a loss including requiring two persons to sign checks or fiduciary bonding of individuals or of specific offices (e.g., Treasurer). If your accounts are such that only one person may sign to withdraw funds or write checks, you should definitely consider fiduciary bonding. Such a policy can also be written for broader crime coverage including robbery and theft both on and off premises. Call our office for more information on your specific needs.
What's the difference between a Ranch Package and Homeowners Insurance?
There are several differences in coverage between a Homeowners policy and a Ranch Package of insurance. Both cover property and liability but the extent to which they will do it differs. Here are some of the most significant differences.
1. Care, Custody & Control Exclusion: Homeowner policies contain an exclusion for non-owned property in the care, custody & control of the insured. This, of course, includes horses which are boarded at your facility or a non-owned horse on your property for even a short period of time, or a friend's horse in your trailer on the way to a show or event. Coverage for the horses under these and countless other circumstances would be excluded on a standard homeowner's policy.
A Ranch Package policy can include standard livestock care, custody & control coverage with limits starting at $5,000 per horse/ $25,000 per occurrence and aggregate. Higher limits are available upon request.
2. Business Pursuits Exclusion: A homeowner policy will also contain a business pursuits exclusion stating that bodily injury or property damage arising out of the business pursuits of the insured is excluded. "Business" is usually defined as an activity which is engaged in for the purpose of monetary or other compensation. Even a person who bards only a few horses or gives a few lessons in exchange for money, feed or anything else of value is engaged in a business pursuit and these activities will be excluded from the liability coverage of a homeowners policy.
A Ranch Package policy uses the ISO or AAIS Commercial General Liability form to give proper commercial and business liability coverage. This form contains no Business Pursuit exclusion and is intended to cover loss arising from bodily injury or property damage which results from equine business activities as described in the declarations of the policy.
3. Business Property Limitations: Lastly, a homeowner policy will limit the available coverage for Business Property in a very important way.
A. Appurtenant or Other Structures - Coverage for appurtenant structures (covered as "other structures" under Coverage B on the policy) is excluded for any structure which can be used in whole or in part for business purposes on a homeowners policy. This includes any farm buildings such as barns, hay storage and tack rooms whether or not they are used for a commercial venture. That means that if you are boarding, training, breeding or even if you only have personal horses, your homeowners policy won't insure those buildings for any losses.
In addition, "Coverage B" is usually limited to ten percent of the limit of the dwelling. In most cases, this amount is not adequate to replace your equine structures.
B. Business Personal Property - Coverage for business personal property (such as tack, hay fed to boarded horses, and other equipment used for the care of horses) is usually limited to $2,500 on the premises, $250 off the premises. This limit is rarely adequate to replace this type of equine property, especially when off the insured location.
A Ranch Package policy lists farm buildings and structures individually (Coverage G) and farm personal property specifically (Coverage E or F) for their true replacement values so that there is no mistaking the intent of the property to be covered, and no business limitation on the use of the property. In addition, Misc. Tack & equipment you own is covered for at least 25% of that limit off premises (limit off premises varies from policy to policy). This is very important if you show or go to various events.
When should I report a potential claim for my horse or business?
Each insurance policy requires that an incident that could result in a claim be reported as soon as it is practical to do so, either to the insurance company's claims line or to your agent. If you do not have a claims number for your insurance carrier, contact your agent as soon as practical.
If you have a potential claim on your horse, a good rule of thumb is to call the claims number for your insurance company while the vet is on the way to see your horse. If you have not yet received a claims phone number or cannot find it, our voice mail gives instructions on how to reach us or your claims line in an emergency situation.
What is Directors & Officers insurance?
Directors & Officers Liability insurance is designed to protect your board members, officers and directors from claims or suits filed by your organization's members or your company's shareholders for perceived losses caused by actions taken or not taken by the directors and officers in their official capacity on behalf of the organization or company. In other words, if your board approves an action that winds up costing your organization lots of money, the members may want to hold the board members responsible. It has nothing to do with claims or suits brought by third parties for damages, that is covered under a Commercial General Liability policy.
Large companies with many shareholders, large organizations with many members, or any situation where the members have a large financial stake in the operations and decision of the directors and officers should consider this coverage. It can also be written to include Employment Practices Liability coverage for such things as sexual harassment. Fiduciary coverage can also be incorporated for an additional charge.