If you are giving riding lessons and receiving compensation (no matter how little), you'll need insurance. Although Equine Legal Solutions is a law firm and does not sell insurance, we often assist clients in determining their coverage needs and in negotiating coverage issues with their insurers. Here are the types of insurance we recommend, and reasons why they are advisable to have.
Commercial Liability Insurance
Commercial liability insurance is fairly broad in scope. It covers most types of liability claims, including negligence. Even if you have a good riding lesson contract with a liability release, you can still be sued. In the United States, it seems that almost anyone can sue almost anyone else for anything. Therefore, one of the most valuable roles of commercial liability insurance is to pay for your legal defense in the event you're sued (not to mention any actual judgment that might be issued against you). The average negligence lawsuit defense runs well into the tens of thousands of dollars in a case that goes to trial, so the cost of commercial liability insurance is money well spent.
If you give lessons at a facility owned by someone else, the facility owner will typically require all on-site instructors to provide proof of insurance, and to name the facility owner as an additional insured.
Even if you give lessons at a facility that has its own commercial liability insurance, you'll still want to have your own liability insurance. Your activities may not be covered by the facility's policy. Even if they are covered, if the facility's commercial liability insurer has to pay out on a claim related to your negligence (or alleged negligence), the insurer may pursue you for reimbursement if you're not listed as an insured party under the policy.
If you own the lesson facility, you will want to have casualty insurance that covers fire, etc. With rural properties, this type of insurance is often called a "farm and ranch policy."
If you have a truck and trailer, you will want to insure them as well. In many cases, your auto insurance will cover damage to the trailer you are towing (but NOT the contents of the trailer), so check with your insurance agent to clarify what your coverage terms are.
Equine Mortality, Major Medical and Loss of Use Insurance
If you have lesson horses that would be difficult to replace, you'll want to consider insuring them. Mortality insurance generally makes sense only if you could not afford to replace the horse without undue financial hardship. Likewise, major medical insurance is recommended if you couldn't afford a several-thousand-dollar vet bill without breaking the bank. Loss of use insurance may be advisable for lesson horses because their value is often heavily dependent upon their ability to be lesson horses. Do be advised that some loss of use policies provide that the insurer may opt to take possession of the horse before they are obligated to pay the claim. If this would be unacceptable to you, loss of use insurance probably does not make sense for your situation.