Equine Business: Understanding Legal Requirements And Obligations

If you're thinking about starting an equine business, it's important to get to grips with the relevant laws and regulations. In the US, most states have some form of the Equine Activity Liability Act (EALA), which limits liability for injuries or deaths related to horses or other farm animals. These laws recognise that horse owners can't control all horse behaviour and aim to protect them from unfair litigation. However, it's important to note that these laws don't offer complete immunity, and accidents can still happen. To protect your business, it's crucial to have the right insurance, such as commercial general liability insurance and professional equine liability insurance. Written contracts are also essential to protecting yourself and your business, and it's always a good idea to consult an equine lawyer when dealing with legal matters.

Equine insurance

The Importance of Equine Insurance

Types of Coverage

• Mortality Coverage: This provides financial protection in the event of the horse's death or theft. It typically covers accidents, injuries, sickness, and disease. The rates are determined by factors such as breed, age, use, sex, and value.
• Major Medical Coverage: This is an additional endorsement to the mortality policy, providing coverage for medical and surgical treatments, as well as diagnostic testing, resulting from accidents, injuries, or illnesses. Coverage limits are usually set at specific amounts.
• Emergency Colic Surgery Coverage: This specific coverage is designed to assist with the costs of emergency colic surgery, which can be expensive.
• Colic Treatment and Surgery Coverage: This endorsement covers medical expenses related to colic or acute abdominal pain, including medications, treatments, and surgical procedures. It has an annual cost per horse and may have age restrictions.
• Short-Term/Trial Term Coverage: This type of insurance is recommended when a horse is being sent to a potential buyer for a trial period. It protects both the seller and buyer in case the horse sustains an injury or illness during this time.

Choosing an Equine Insurance Provider

When selecting an equine insurance provider, it is essential to consider their expertise and ability to tailor coverage to your unique needs. Look for a provider with a strong understanding of the equine industry and its risks. Ensure they can offer specialized policies for different types of horse ownership, such as private owners, farms, and commercial equine operations. It is also beneficial to choose a provider that can provide guidance and support in navigating the complexities of equine law and liability.

Equine Law and Liability

Equine law, or equine activity statutes, plays a crucial role in managing liability for horse owners and professionals. These laws vary by state but aim to limit the liability of equine owners and professionals in the event of injuries or deaths related to horses or other farm animals. They recognize that horse owners cannot control all horse behaviour, and accidents may occur. Equine law provides a framework for balancing liability between riders and trainers, encouraging safe practices, and discouraging frivolous lawsuits. When considering equine insurance, it is essential to understand the specific statutes and requirements of your state to ensure compliance and adequate protection.

Equine warning signs

Warning signs are an important aspect of an equine business, and there are several considerations to keep in mind to ensure compliance with the law and to effectively manage risk. Here are some key points about equine warning signs:

• State-Specific Requirements: In the United States, each state has its own equine liability laws, often referred to as Equine Activity Statutes or the Equine Activity Liability Act (EALA). These laws outline specific requirements for warning signs. It is crucial to consult the laws in your state to ensure that your warning signs adhere to the mandated wording, placement, and content.
• Sign Placement and Prominence: Equine warning signs should be strategically placed and easily visible to visitors. Ensure that signs are displayed prominently at the entrance of your property, near stables or stalls, and in any areas where horses and people may interact. Proper placement helps ensure that individuals are aware of the risks and cannot claim ignorance of the warnings.
• Specific Risks and Hazards: Equine warning signs should clearly outline the inherent risks associated with horses and equine activities. This includes risks such as unpredictable behaviour, bolting, bucking, and kicking. Be sure to mention specific hazards related to your horses, such as a horse with a known tendency to kick or bite.
• No Trespassing and Trespasser Liability: To protect yourself from potential liability, post clear "No Trespassing" signs on your property. This helps establish that individuals who enter the premises without authorisation do so at their own risk. Consider including additional warnings, such as "Do Not Feed or Pet the Horses," to discourage unauthorised interactions with your horses.
• Equipment and Tack Safety: Warning signs should also address equipment-related risks. For example, if you provide riding equipment or tack, warn riders to inspect the equipment before use and to notify staff of any defects or issues. This can help mitigate claims related to faulty or defective equipment.
• Assumption of Risk and Waivers: In addition to warning signs, consider implementing liability waivers for individuals who interact with your horses. While warning signs educate visitors about the risks, waivers help ensure that they acknowledge and accept those risks. Consult with an equine attorney to ensure your waivers are legally sound and compliant with state laws.
• Regular Review and Update: Equine warning signs should be reviewed and updated periodically to ensure they remain effective and relevant. If you make changes to your operations, introduce new horses, or become aware of additional risks, update your warning signs accordingly. Regular reviews help ensure that your signs accurately reflect the current risks and hazards on your property.

Remember, the specific requirements for equine warning signs may vary depending on your location. Consult with a local equine attorney or legal professional to ensure that your warning signs comply with the laws in your state or country.

Equine liability releases

A well-drafted liability release will include specific details about the risks involved in the activity, such as horseback riding, and will be much longer than a generic release. It should also include the category of people who could be sued, such as employees and contractors, and the property owners if the stable does not own the property.

It is important to remember that each person who might sue must sign a liability release, as an individual can only sign away their own rights. This includes family members, guests, and spectators who come into contact with the horses. For minors, a parent or guardian must sign on their behalf. It is also recommended to have a liability release that includes an indemnification provision, where the signer agrees to pay for the business's legal defence if someone else sues.

Liability releases are important for discouraging lawsuits and can provide a legal defence if a lawsuit does occur. However, it is crucial that they are properly drafted by a legal professional to ensure they are enforceable.

Equine contracts

When creating or signing an equine contract, it is essential to ensure that it is comprehensive, accurate, and easily enforceable. The contract should reflect the agreement and intention of both parties and be compliant with state laws and requirements.

• Bill of Sale: This document serves as a record of the sale and purchase of a horse, detailing the transaction and the terms agreed upon by both parties.
• Liability Release or Waiver: This document is crucial for limiting liability and protecting horse owners, trainers, and businesses in the event of accidents or injuries involving horses. It outlines the risks associated with equine activities and releases the business or owner from liability.
• Horse Lease Agreement: This contract outlines the terms and conditions of leasing a horse, including the duration, payment, and responsibilities of both the lessor and lessee.
• Horse Boarding Agreement: This agreement establishes the rights and obligations of both the horse owner and the boarding facility, covering aspects such as medical care, security, and payment.
• Equine Co-Ownership Agreement: When a horse is owned by multiple parties, this contract outlines the rights and responsibilities of each owner, including financial contributions, decision-making, and usage of the horse.
• Horse Training Contract: This document outlines the terms of training services provided to a horse, including the trainer's responsibilities, fees, and any liability releases.
• Horse Sale Commission Contract: This contract is used when a trainer or equine professional assists a customer in selecting and purchasing a horse, outlining the services provided and any associated fees or commissions.
• Horse Trailer Use Agreement: This agreement is for the rental or loaning of a horse trailer to another party, detailing the terms of use, liability releases, and any relevant safety information.

It is always advisable to consult with an equine attorney or lawyer when drafting or reviewing equine contracts to ensure they are legally sound and provide the necessary protections for all involved parties.

Equine leases

Types of Equine Leases

There are two main types of equine leases: full and partial (also known as half). A full lease gives the lessee unrestricted access to the horse, while the owner typically does not use the horse. A partial lease allows the lessee to use the horse only part of the time, and the agreement should specify exactly when this is permitted.

Lease Terms

Lease Fees and Costs

In a paid lease, the lessee pays fees to the owner for the use of the horse and may also be financially responsible for some or all of the horse's care. In a free lease, the lessee does not pay a fee but usually covers all care costs. The lease agreement should specify who is responsible for which costs and how payments will be made.

Horse Care

The lease should detail the standard of care the horse will receive, including shelter, feed, water, grooming, exercise, farrier care, dental care, and veterinary care. It should also specify who will be in possession of the horse and who will make decisions about its care.

Horse Use

The lease should outline how the lessee may ride or otherwise use the horse, including any restrictions on riders, types of riding or use, and whether the horse can be trailered and for what purposes.

Termination

The lease agreement should specify the terms for termination, including the required notice and how it should be given. It should also detail the responsibilities of each party upon termination, such as transporting the horse back to the owner and ensuring required documentation.

Liability

Default and Remedies

The lease should outline how disputes will be handled if one party does not uphold the agreement. This could include alternative dispute resolution methods such as mediation or arbitration.

Choice of Law and Venue

When the owner and lessee live in different states, the lease should specify which state's law will apply and which court will have jurisdiction to hear a dispute.

Example Scenarios

Consider the following scenarios:

• A mare with no breeding rights: Joyce has a retired Arabian mare that she plans to give to her granddaughter in three years. She wants to lease the horse until then to keep it active. The lease includes a fee, restrictions on housing and breeding, and care provisions.
• Anticipated time constraints: Tricia is expecting a baby and wants to lease her horse as she won't have the time or means to care for it. The lease includes provisions for termination, care, and the owner's right to visit and ride the horse.
• Underutilised lesson horses: Lynne runs a lesson stable and offers some of her horses for lease to students to keep them active. The lease includes restrictions on use, housing, care, and payment.
• Maintaining training during absence: Jeff is relocating for work and leases his horse to ensure it continues training in his absence. The lease includes provisions for housing, care, payment, and use.

Frequently asked questions