Insurance for Equestrian Activitiesw

Does anyone belong to s residential HOA with any residents having established commercial boarding/riding stables on their properties, and clients using common areas for riding? (area is zoned agricultural and covenants permit boarding stables - but change is recent and HOA has no experience).

What type/amount of liability insurance do you carry?

Jill,

The only person to call is the insurance agent who serves your HOA with its existing liability policy for your common areas. The insurer will certainly have already assessed the horse riding risk and compared it with state laws that often protect land owners when people choose to take obvious risks.

Check there first as they'll be writing your policy if you need additional coverage. You're smart to inquire but having a neighborhood where horse boarding and care is permitted, I'd think, would be a huge draw for a segment of buyers.

Kelly,

Thanks. The community had a standard HOA policy from a leading company (SF) when the covenants prohibited business activities. The company did not want the exposure to the commercial risk and claimed to have no way of charging for the additional exposure. We did find a company/policy that would cover the exposure. The community is reluctant to increase the general liability beyond the 1M/2M of the previous policy. The Board is not certain this is adequate to protect the HOA.

Thank you, Tim. That's an interesting option. I'm not sure it would be as effective in our case. Horseback riding is considered high risk by the inurance industry. All of these commercial clients should be required to sign a liability waiver (all we can do is hope the stable owners are diligent about this), but the American Equestrian Alliance rates VA Equine Liability Law as "difficult" vs. "effective" and it allows liability for "ordinary" negligence. Additionally, I understand these clients would be classified in "premise liability" as "invitees" and "customers are owed a duty of reasonable care". That may be too much information, but I understand there is more of a concern here than if a trespasser or resident were injured. The situation is similar to the Day Care as many of the clients are minors.

The easy/obvious solution would be to restrict the stable clients to the stable properties (which sounds like this is the inevitable conclusion your community got to), but at this point, only the Board appears concerned about the liability and we'd rather not do that. As it should be, as our covenants charge the Board with procuring adequate liability and hazard insurance. We're attempting to define "adequate" in our situation.

Again, thank you so much for the helpful insight.

Good Advice Nancy. The old agency would not insure if the covenants permit any commercial boarding. They did not have a problem with private, residential ownership and riding in the community as long as there were no commercial endeavors.

The new policy, without a commercial equine exclusion, at their recommended coverage and 3M (umbrella), is appx. 10 times what the community has previously paid.

Discussing this has made me see things a little more clearly. The new policy application and interiew process, identified the activity, the company assessed the risk and recommended $3M, which is in line with what you've recommended (3-5 M umbrella).

Additional comments, experiences, best-business practices, are welcomed and appreciated.

I'm moving to your place and leaving this one behind.

An insurance company will tell you exactly what you need. Call them, get quotes. Be prepared for it to be expensive, because people get hurt regularly around horses.

I don't know a whole lot about insurance but shouldn't the operator of the commercial horse facility carry a huge liability policy naming the association as an additional insured party? The liability in this case arises from the commercial operation and not from normal HOA operation. Whatever insurance is required should be provided by the commercial operator and not the homeowners.

Jill - Larry has a great idea. In the beginning I thought your Assn had the stables. My mistake. The owners of the stables should list your Assn as an additional insured if they are using your common areas.

Have you checked your CC&R's it should state who can use the common area's. In our case you can only have a horse if you are a homeowner a different situation than yours. Having that said at one point we looked into Commerial Boarding and insurance was too high. I just want to make sure I understand your HOA allows a Commercial Horse Stable to operate on HOA property? I'm not sure how large your community is but I hope the Stables has a huge liabilty policy and your HOA is named as the "additional insured". Just curious, I'm assuming rent is being paid to the HOA?

Common areas are private road and easement. Existing insurance company acknowledged equestrian activities of members to and from private residences along common areas but stated it would not renew policy if any commercial boarding were permitted in community.

Deed of Divison states easements for sole use by pedestrian and vehicular traffic, CCRs state exclusive use by owners and guests, relatively recent amendment allows commercial stables in community but does not address use of common areas by these commercial entities.

Small community. HOA is not named as additonal insured but even if possible to monitor, we're told that does not protect the HOA from a direct law suit, i.e. HOA needs coverage itself.

Yes, you're very close John except the people are not renting the homeowner's horses, they're renting the homeowner's barn and facilities to keep their horses there and riding on the common areas.

We have found an insurance policy that will cover it. I believe state law requires that owners that create the risk be responsible for costs to to cover the risk. Of course the CCRs require all assessments to be uniform, so it will require an amendment to comply.

We've found insurance, still struggling a bit with adequate, because I agree that standard HOA liability may not be enough in this case.