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View Full Version : taking on a boarder: insurance/legality considerations?



seramisu
May. 12, 2011, 11:44 PM
I just got an email from an old friend asking if I would be interested in boarding her retiree - he is currently at a show barn and she needs someplace cheaper.

It sounds perfect to me: He is a low-maintenance horse, a good citizen, a benign herd leader (my young mares would benefit greatly from this) and having a third horse on the property would free me up to take one of my girls away for a vet appointment or riding lesson without having to take the other one along so she doesn't get left alone and freak out. On top of that, my friend is a consciencious yet pretty hands-off owner, which seems ideal for a boarder - around enough to take care of her horse, but not too much =)

So, what do I need to consider in terms of insurance / contracts / safeguards / etc? I'm fine with being informal - this is someone I know and trust - but I don't want to be stupid.

TIA

GoForAGallop
May. 13, 2011, 12:16 AM
I'm fine with being informal - this is someone I know and trust

TIA

Well, you shouldn't be. Seriously. More than with an actual stranger, even, you need to make sure things are firmly outlined and spelled out in a real contract when it's between friends. Because it is very easy for friends to feel taken advantage of. "Oh, Suzy won't mind swapping Buster's blankets four times a day, I know she loves them!" or "Wow, I really wish Betty wouldn't be so casual about paying on time, I need to pay the bills for her horse's feed."

Make sure everything, expectations from both sides, is spelled out. I have boarded a horse for a friend for over four years now. When she asked me about boarding, I said (roughly): "I would love to have Dobbin here. But I want you to know that I don't blanket unless the weather is really bad, and I can't be out there swapping blankets for you. The horses are out unless the weather is terrible. (Some people have an issue with this because they feel like they are "paying for the stall" and the horse should use it, so this is why I brought that point up.), etc, etc, etc." I also made sure to set up a one-month trial in which either of us could bail....the horse before her horse was herdbound to a dangerous level, and I couldn't take my own horses away without him literally trying to jump out of the stall. I didn't have the "trial period" built into the contract, and was stuck with him for a few months while his owner leisurely found him another barn to go to.

I think one of the most important things is: don't short yourself on the money. Because nothing will build up resentment on your part faster. She's your friend, and she's looking for someplace cheaper, but that doesn't mean that you have to subsidize her hobby.

The insurance that you're looking for is Care, Custody, and Control Insurance. And yes, you must have it. Under my general farm policy, it costs me about $300 a year....it will be more as a separate policy, so be sure to factor that into her board costs as well. You are also going to want to make sure that her horse has some sort of liability coverage, if it is not already covered under her homeowners. You are also going to want to place a call to YOUR homeowners insurance, to make sure that they are okay with you starting a boarding business. The last thing you want to do is have to file a claim and find out your policy is invalid because of your new "business."

JanM
May. 13, 2011, 07:37 AM
I totally agree with Go. You also need an ironclad contract in case it doesn't work out, and to cover the bad possibiliities (nonpayment, destructive horse, or vet emergencies, etc). Also don't forget to get a good waiver from her, and cover who can come on your property besides the owner. You don't want to look out the window some morning and see a bunch of the owners buddies decided to come out and visit horsie, and bring the kiddies for a pony ride-it may never happen, but you need to cover whatever might impact you.

baysngreys
May. 13, 2011, 10:16 AM
Boarding agreement, liability release, and care/custody/control insurance.

You can probably find a generic boarding agreement on-line for your state. Make any changes that pertain to your situation - i.e. are you offering pasture, stall, blanketing, month to month, price, deposit?
What is the owner responsible for? Feed? Supplements? Worming? Shoeing? Vet?

I have a clause that gives me 2 weeks to decide if the horse is "dangerous" to either me, my property or other horses. When someone fails to mention that their horse dismantles stalls this really comes in handy!

Make sure you discuss what can be kept on your property besides her horse - trunks? trailers? Blankets? Some owners have a zillion, can she leave them in the barn or take them home at the end of the season?

Even if it is a good friend, treat it like you've never met her.

Your ins co. will want to see your "barn rules". Hours of operation, safety concerns, etc. Does your state have a limity liability law? Will you enforce using a helmet? Are you okay with her running into the house to use the bathroom in her boots? Bringing her dog(s)?

For some reason comon sense goes out the window when someone hands you a check for board!!!

SMF11
May. 13, 2011, 10:16 AM
In terms of insurance, you need liability if you are charging $$ for board. (Otherwise, your homeowner's policy will not pay as you are now running a business). That's to cover you if her horse injures someone, say, by getting loose and on to the road and causing a car accident.

In my opinion, care, custody and control is less important for retirees. It depends on your assessment of the risk, but the value of the retirees, monetarily anyway, is virtually nothing.

It is up to you, but my liability is $500 and CCC is another $500, so you'd have to decide if it was worth paying $1000 to have her board with you. How much are you charging for board? If it were me, and that was something like 3 or 4 months board, *it would not be worth it*! Do you really want to work for three months just to pay the insurance bill?

On the other hand, I think the Farm Bureau had insurance to cover this situation, but you had to make less than a pretty low amount (can't remember now) to qualify for the coverage. I know one boarder here would have put me over their limit. I also don't know if it was just liability or CCC also.

seramisu
May. 13, 2011, 10:47 AM
Thank you both. All good thoughts. Keep 'em coming =)

Guilherme
May. 13, 2011, 12:29 PM
Talk to your insurance agent. Any information you get here can help but will be "generaic" at best. The agent is, in this case, the horse's mouth. :)

Just what risk you face varies from state to state. The agent should have a handle on that. If not they can talk to people in their organization and you correct information.

Good luck in your program.

G.

vicarious
May. 13, 2011, 12:40 PM
You may find that by the time you cover yourself with the necessary insurance, it may not be worth it to board.

Example!!!! A friend had a boarder's horse break loose, run out in the road, get hit by car, broke leg. Owners claimed negligence on her part,so no liability on their par. She had no insurance, spent ages paying off the judgement against her brought by the driver.

Horses are an accident looking for a place to happen. Act accordingly.

IronwoodFarm
May. 13, 2011, 01:05 PM
I agree that insurance can be expensive for one boarder, but it is imperative to have commercial liability on your business. You might be able to skip CCC if you just have retirees. As others have said, contact an equine insurance professional for insurance options, but expect to pay something.

seramisu
May. 13, 2011, 10:55 PM
I have a date to talk to my insurance agent next week, so don't worry, I will get the specifics then. In the meantime I'm trying to decide if I (and my friend) should get our hopes up.

I certainly don't consider myself a business, I'm not going to set up a DBA account for just one boarder. But of course the insurer has to see it that way too =) Would the situation be different if I wasn't being paid? If, for instance, she bought her own hay and grain, and came and did chores for me once a week - straight exchange, no money changes hands?

WildBlue
May. 14, 2011, 08:07 AM
I'm not a lawyer and don't work in insurance... but my understanding is that you still have a lot of the same liabilities since it is not your horse and it's on your property. I had friends doing self-care board on my farm for years, and still was recommend to carry the full CCC and liability insurance.

GrayCatFarm
May. 14, 2011, 08:54 AM
I board my retired mare at an acquaintance's farmette. I still carry her on my own liability insurance. I suggest that you require that she do the same - lawyers always go after the deepest pockets (this is NOT a diss on lawyers, I love them). I provided a boarding contract that spells out who pays for what, who is responsible for scheduling vet and farrier, etc. It states the contract can be terminated at any time without stating the reason by either party. I am mindful that this is a retirement situation and when I visit my mare, I am visiting my colleague's HOME. I don't ask to use her bathroom; I don't linger to enjoy the view; I don't invade her personal time at home (she's got a full time job and an 8 yr old son). My contract states that I have access to her property to visit my horse, but have to provide 24 hrs advance notice of a visit. She can't turn me away, and the advance notice is a courtesy. That is a nicety you might wish to have in your contract.

seramisu
May. 14, 2011, 08:08 PM
Graycat - how does that work, you carrying your own liability on your retiree? Is that a separate policy, or do you have it attached to your home or farm insurance? (Neither of which would help me too much I suppose as my friend rents.) Or is your horse insured, and it's a part of that policy? This sounds like the simplest solution, if she could get her own liability coverage.

msj
May. 14, 2011, 08:54 PM
I have a date to talk to my insurance agent next week, so don't worry, I will get the specifics then. In the meantime I'm trying to decide if I (and my friend) should get our hopes up.

I certainly don't consider myself a business, I'm not going to set up a DBA account for just one boarder. But of course the insurer has to see it that way too =) Would the situation be different if I wasn't being paid? If, for instance, she bought her own hay and grain, and came and did chores for me once a week - straight exchange, no money changes hands?

I know from my tax preparer that if you accept any money for board you are supposed to count that as income. You can then deduct various bills (hay, grain, bedding, manure removal, etc) to offset that income.

For example, my neighbor wanted to come over and use my indoor all winter. I told her she'd have to pay the entire liability insurance policy ($500) as I no longer rode. If she wanted to bring a friend or if anyone else was interested they could split that bill. Also I charged her $10/horse/day up to a max of $100/horse/month. In order to satisfy the IRS, I had to use the snow plowing bills to offset the monthly income. The insurance was a wash as I took it out but she reimbursed me completely.

saddleup
May. 14, 2011, 10:44 PM
Plenty of good advice here. It's not as simple as it sounds, is it?

I boarded a friend's horse for a year and it didn't end well. It's a miracle that we're still friends, but it was touch and go for a while. Her horse was destructive, and it was my beautiful new barn he was gouging with his teeth whenever it was feeding time, and he would kick the walls if he didn't get turned out as fast as he thought he should. When I called it to her attention she just shrugged, and it went downhill from there. I ended up raising the board to cover the real costs, (there was no profit in it at all) and she moved out. In that first year's time the cost of shavings went up from $5 to $9 a bale, hay prices went through the roof, and due to an injury I had to hire someone to do the stalls. As someone else said, you don't need to subsidize your friend's hobby.

Trust me, it's absolutely necessary to have a contract that itemizes every possible thing that could go wrong, and sets hours for visitors, vet visits, etc. My boarder assumed I'd hold her horse for the vet or farrier, and when I said I wouldn't she was offended...after all, we were friends, right?

I'd never do it again.

Guilherme
May. 14, 2011, 10:44 PM
I have a date to talk to my insurance agent next week, so don't worry, I will get the specifics then. In the meantime I'm trying to decide if I (and my friend) should get our hopes up.

I certainly don't consider myself a business, I'm not going to set up a DBA account for just one boarder. But of course the insurer has to see it that way too =) Would the situation be different if I wasn't being paid? If, for instance, she bought her own hay and grain, and came and did chores for me once a week - straight exchange, no money changes hands?

Barter can make you a "business" in the eyes of the Alphabet Soup as quickly as cash.

You could try for a "hobby" status for IRS purposes. You would have to declare income from your boarder and would be able to deduct expenses up to the amount of the board paid. It would be an odd status, but it might work.

As a practical matter your biggest risk is injury to a third party by the boarder's horse. This could happen on the property or during an "elopement." A lot will ride on your agent's take on this whole thing.

The second biggest risk is that your friend doesn't pay you for the services you'll render. What will you do then? You can't lay this one off with insurance. It's a real problem you should consider before starting the venture. More than one friendship has foundered on the rocks and shoals of a "deal between friends."

G.

GrayCatFarm
May. 17, 2011, 10:27 PM
Graycat - how does that work, you carrying your own liability on your retiree? Is that a separate policy, or do you have it attached to your home or farm insurance? (Neither of which would help me too much I suppose as my friend rents.) Or is your horse insured, and it's a part of that policy? This sounds like the simplest solution, if she could get her own liability coverage.

I have a liability policy that costs me $500/yr and covers up to 5 horses. It's a separate policy. So, if the Diva were to take out someone in the alley as she exited the stall at the show (and yes, at my first show she went sailing by my trainer full tilt looking for the stud on the farm) I would be covered. It is solely for liability, no morbidity or mortality. PM for the name of the company. They were easy to work with, and even covered her when she was used by my trainer as a lesson horse with proper registration of HIS policy.

ZELLA
May. 18, 2011, 01:34 PM
Some homeowner's policies, depending on the insurer, can become void if you have a boarder, because this makes you a commercial enterprise in their eyes. This can be the case even if you obtain equine commercial liability coverage. Definitely check on this with your agent.