Equine Business Insurance Basics

By Lisa Skylis | email: skylisli@msu.edu

Are you ready to turn your horse hobby into an equine small business? Do you have what it takes to turn your passion into a career? Whether your dream business is a tack shop, freelance photography, a boarding barn, or anything else, it's crucial to learn how to set your business up for success before launching and learn from those who've already made the leap. The goal of this Equine Small Business Series is to guide you through the process of becoming a small business, be a resource for growing and maintaining your small business, and give real-life advice from equine professionals with an established small business. Read on and let's get to business!

Planning for Success

In a previous installment of this equine small business series, you developed your business plan and calculated a rough estimate of your starter costs. As a refresher, a business plan is your roadmap to achievement and should summarize your business's past, current state, and future goals. A thorough business plan is the key to convincing yourself, your customers, and your future investors that you're serious about success! Another critical step to starting your business is to calculate your startup costs, as this will allow potential investors to estimate when you might turn a profit. Both of these key elements to success need to be in place before you or your future investors fund your equine business venture.

Once you know how much startup funding you need to get your new business up-and-running, it's time to figure out how you'll get it. There's no one-size-fits-all method for funding your business, but some types of funding will be better suited to your specific situation than others and sometimes the best answer might be a combination of several options. Essentially, there are four primary options to get funding for your equine small business: self-funding, crowdfunding, small business loans, and microloans. Whichever your loan options might be, it's a good idea to compare any loan offers in search for the best possible terms and lowest possible interest rates for your equine small business loan. As a general rule, a lender will always favor the low-risk, well-organized business with a higher credit score, because it'll be the most likely to yield a profit. Choosing a method of funding is one of the first and most important decisions you will make as an equine small business owner. Remember, the goal is to get your business off the ground and not to saddle you with debt from the start.

Although it may seem intimidating, building business credit is essential to convincing yourself, your customers, and your future investors that you mean business! As you may have guessed, business credit works similarly to personal credit; it's used as an indicator of how reliable and healthy both yourself and your business may be. When you establish business credit, you open the door to financing through loans, applying for credit cards, and building partnerships with vendors and other businesses. For monitoring your score, you can get a copy of your equine small business's report from Equifax, Dun & Bradstreet,

Experian, or similar reporting services. If you discover any outdated information or any suspicious activity, be sure to contact the business credit agency right away A good business credit score can make the difference between launching your dream equine photography studio and keeping that dream on the shelf for another decade.

Equine Insurance Basics

Regardless if you're just starting out or expanding your services, every equine business should have a solid insurance plan! General liability insurance is a must to protect yourself and your business from the inevitable risks that horses (yes, even your trusty lesson pony) pose to your clients. The safest bet for selecting the correct insurance coverage is to use either a licensed insurance broker or agent. A broker sells insurance from several different companies because they're not employed by a singular insurance firm. Conversely, an agent works for only one firm and will only offer insurance products from a single company

If you don't own the horses you're working with in your business, the best option would be a Care, Custody, or Control coverage plan. A CCC plan is based on the value of each horse and can also typically cover tack or equipment that you use but don't own. In the event of an accident or emergency, a CCC policy pays the legal amount that you're obligated to pay, on your behalf, if serious injury or death happens to a horse that is in your care, custody, or control. Although not included in most liability insurance policies, this plan would protect you and your business in the event that the horse's owner sues you after an accident.

Often, mortality insurance is bundled with medical and surgical insurance policies, which would translate to life and health insurance for humans. A sobering thought, mortality insurance reimburses a horse owner if their horse dies and premiums are based on the horse's breed, age, use, and bloodlines. Most insurance policies require a certificate of your horse's health from the vet and will cover nearly any cause of death including colic, fatal injuries, fire, and freak accidents. Medical and surgical policies typically cover diagnostics, medications, surgeries, and postoperative care. Similar to human health insurance, each horse has a deductible and an annual premium, and there's usually a $5,000 claim limit. Typically, it does not cover routine care such as vaccines, dental care, some alternative therapies, elective cosmetic surgeries, and treatments for congenital birth defects. Mortality, medical, surgical insurance policies could help you avoid every horse owner's nightmare: whether or not you can afford to save your horse's life.

Whether you are selecting your first plan or rethinking your current plan, these are some tips for choosing equine business insurance:

• Be sure that any and all of your horse-related activities are disclosed and covered in your plan

• Annually evaluate potential risks involved in your business, such as: your business' financial stability, the value of your horses and tack, your level of personal involvement, and more

• If possible, boarders at your operation should carry their own insurance for their horse to cover any major medical emergency that could happen at your barn

Straight from the Equine Businesswoman's Mouth

“Yes, absolutely [have] insurance!” When Carien Schippers was asked if equine small businesses should have insurance, she was adamant. Schippers is the founder and owner of the Equine Photographers Network, a global community and platform of equine photographers who promote and share their work as well as participate in members-only networking and career development events. “Liability insurance as well as equipment insurance. Equines are inherently dangerous,” Schippers explained, “and sometimes photographers may unknowingly cause an accident, or be blamed for one. This is why it is so important for us to understand horses and horse behavior!”

Given the potential for emotional and financial devastation, having a clear understanding of equine business insurance is critical to protect yourself and your business. There are as many different kinds of insurance policies as there are horse businesses and working with a licensed insurance seller to get the coverage you need could make the difference between bankruptcy & success.

Standing in Holly, MI

Bradfield Drum Horses

(248) 295-1548 | Email: BradfieldDrumHorses@gmail.com

URL: https://bradfielddrumhorses.com/ Facebook: www.facebook.com/BradfieldDrums

BH Spectacular holds 22 titles and is proven in many disciplines. He holds multiple highpoint awards and has won END of year awards through the IDHA You can see him in the Hallmark movie Cupids Christmas and A Pumpkin Spice Holiday He will be the main character of a new movie filming soon called HeartBeat of a Drum Horse

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Lisa Skylis graduated from Michigan State University with a degree in Animal Science. She is a professional freelance writer Lisa’s work largely focuses on the equine industry. When she’s not writing, Lisa can be found doting on the horses at her local therapeutic riding barn or entertaining her mischievous Golden Retriever, Roy. Freelance inquiries can be sent to skylisli@msu.edu

Sources for this article include: 2019 article from Horses Exten-sion titled “Equine Business Resources-Insurance for Equine Bus-inesses”, an article from the U.S Equestrian Federation authored by Markel Insurance in 2020 titled “Commercial General Liability Horse Insurance: Who Needs It and Why?”, and a 2019 article from Horses Extension titled “Equine Business Resources-Liabilities and Waivers”. Extension Horses maintains a host of equine business-related articles online at: https://horses.extension.org/