December 2015 - Are You Covered?
Written by CRM
Saturday, 28 November 2015 01:56
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Breeding businesses have unique insurance needs.

Running a breeding farm can be rewarding, but it also can be risky, particularly if you do not have the right insurance policy to protect your operation.

Standard homeowners insurance and a personal umbrella policy typically will not cover business-related exposures. Commercial equine operations are better protected by farm and ranch insurance that carries the necessary endorsements to address your operation’s unique needs.

If you breed horses, ask yourself these five questions to help ensure you have the right protection for your business:

1. Do I temporarily board customers’ horses during the breeding process?

Boarding non-owned horses, even for a short time, exposes you to risks that could be costly. What if the animal becomes ill or injured, or dies while in your care? 

A strong Hold Harmless agreement is your first line of defense, but you cannot rely on this for all scenarios. Care, Custody and Control insurance is essential to help protect equine breeders from the liability associated with risks to non-owned horses on their property. Talk to your independent insurance agent about this coverage. Be sure to factor in the value of the visiting horses to determine what limits are adequate for your operation.

2. Do I have sufficient liability coverage for my breeding operation?

The breeding process presents a number of risks, not only to horses, but also to people. For example, a customer could get injured on your property by falling or tripping, or your horse could hurt a guest. Injuries also could occur off premises. What if your horse hurts someone at another facility or horse show?

Discuss farm and ranch liability coverage with your insurance agent. Liability insurance helps cover damages if you are sued by a third party who is injured on your property.

3. Do I have specialty equipment on my property?

Breeding operations require a variety of equipment and supplies to help in the breeding process, such as ultrasound machines, microscopes, incubators and cooling systems that store semen and perishable animal health products.

Breeding-related equipment may require a special endorsement under your farm and ranch policy. Additionally, be sure to include specific coverage for perishable animal health products, if necessary.

4. Have I considered extra expenses related to my equine business?

Like every business, breeding operations can suffer losses from unexpected events, such as fire or extreme weather. To keep your business up and running during these emergencies, you may have to move your breeding operation to another location while you rebuild.

Prepare in advance for unexpected events by taking practical steps to secure a temporary location in the event of a loss. Talk to neighbors, friends or other equine facilities in your area about the possibility of using their property for your operation.

In addition to a contingency plan, you also should determine the costs of relocating your operation quickly and renting property at this temporary location. Relocation and rental costs are considered extra expenses and are not included in a standard homeowners policy, so be sure you have the appropriate “extra expense” coverage added to your farm and ranch policy.

5. Have I made changes to my breeding operation, requiring additional insurance protection?

Equine businesses, including breeding operations, can change over time. For example, as technology advances, you may purchase new equipment. You may add horses or build new barns. These upgrades present new exposures that may not be covered under your existing farm and ranch policy. The same goes for adding services, such as boarding horses or offering riding lessons. Be certain that operational changes have not created exposures that your current policy does not cover.

Get A Check-up 

Protect yourself and your business. Regularly review your current operations with your independent insurance agent to help ensure you have adequate coverage for all of your exposures. Consider recent upgrades and structural or equipment additions, in addition to operational changes that you plan to put into place in the near future.

Article provided by Travelers’ Mike Williams, senior director, product, Travelers Agribusiness.