Equine Insurance 1 The webinar will begin shortly. There is no audio at this time. This presentation is being

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Equine Insurance

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Sponsored By: The Hartford Financial

Services Livestock


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Polling

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DisclaimerInsurance forms and endorsements vary based on insurance company; changes in edition dates; regulations; court decisions;

and state jurisdiction. This instructional materials provided by Insight is intended as a general guideline and any interpretations provided by the instructor or the creator(s) of this material do not

modify or revise insurance policy language. In providing these materials, the authors assume neither liability nor responsibility

to any person or business with respect to any loss that is alleged to be caused directly or indirectly as a result of the instructional

materials provided.

Copyright 2010 – 2013 All Rights Reserved

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Your Instructor Today

Sponsored By: The Hartford Financial

Services Livestock

Mike Sergeant , AFIS Sales & Service Director, The Hartford

Financial Services Livestock


Polling Question #1

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Topics Covered

Background on Equine Insurance Equine Risk Management Basics Understand & describe key areas of the

application Understand & describe key areas of the

policy Understand & describe the endorsements

available

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Horse Facts (American Horse Council) http://www.horsecouncil.org/national-economic-impact-us-horse-industry There are 9.2 million horses in the United

States . 4.6 million Americans are involved in the

industry as horse owners, service providers, employees and volunteers. Tens of millions more participate as spectators.

2 million people own horses.

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Horse Facts (American Horse Council) http://www.horsecouncil.org/national-economic-impact-us-horse-industry • The horse industry has a direct economic

effect on the U.S. of $39 billion annually. • The industry has a $102 billion impact on

the U.S. economy when the multiplier effect of spending by industry suppliers and employees is taken into account. Including off-site spending of spectators would result in an even higher figure.

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Horse Facts (American Horse Council) http://www.horsecouncil.org/national-economic-impact-us-horse-industry Numbers of Horses The study concludes that there are 9.2 million horses in the U.S. , including horses used for recreation, showing, racing, competition, sport, breeding and work. This includes horses used both commercially and for pleasure.

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Polling Questions #2

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Horse Facts (American Horse Council) http://www.horsecouncil.org/national-economic-impact-us-horse-industry The number of horses by activity is:Recreation 3,906,923Showing 2,718,954Racing 844,531Other 1,752,439 Total 9,222,847

“Other” activities include farm and ranch work, rodeo, carriage horses, polo, police work, informal competitions, etc.

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Big Exposure

Most states* have passed laws that limit liability in the horse business.

A legal determination that horses can be inherently dangerous.

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Big Exposure

There will always be accidents. It has been reported that more than one third of fatal horse accidents happen on the ground. When you pit a thousand pound, not very bright (by human standards) horse against a one hundred and fifty pound human, the result will be an occasional mishap.

Some of the most frequent horse related injuries are; being bitten, struck, kicked, stepped on, squeezed or butted.

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Big Exposure

By nature, the horse is a herd animal with its natural pecking order. Hopefully, as a horse handler, owners are at the top of that pecking order. If not in full control (mental) the chance of injury is greater.

A horse’s performance relies, not only on its predisposition and genetics, but also on the trainers’ and handlers’ competence, and the horse’s health and environment.

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Horse Causes Major Highway Accident ESCAMBIA CO., Fla. A horse tore through her mini-van. Swindall

says she hit the horse on the right side of her car, it smashed her windshield, then tore off the top of her entire car. She said, "We walked away [and] the first thing I said when I got out of car was he horse's body then landed in the street and two more cars hit it.

She was driving north on Highway 29 to pick up some newspapers, when she saw something just feet away. She thought it was three people but it was actually three horses

http://www.fox10tv.com/dpp/mobile_news/horse_causes_major_highway_accident


Terminology—Light Horses

• Quarter Horse• Paint/Pinto• Appaloosa• Morgan• Mustangs• Warm Bloods• Thoroughbred

• Standard bred• Palominos• Paso Fino Arabian

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Terminology Draft Horses

• Clydesdale• Percheron• Belgium• Shire• Suffolk

• Other• Ponies• Miniatures• Donkey• Mule• Hennie

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Where do we “keep” our horses• Shelter• Pole Barn• Stall Barn• Indoor Arena• Stables• Paddocks • Horse Motel

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Definition of Uses - Horses

Breeding: Fertile stallions and mares used for the breeding of offspring.

Cutting/Reining: Animals kept for or used in competitive exhibitions, where the horse cuts cattle from the herd.



Dressage: Animals kept for or used in competitive exhibitions of a low athletic nature wherein execution of gait, overall style and adherence to patterns are the key grading criteria.

High Hazard: Animals kept or used in competitive events on a high athletic level or hazardous nature: such as polo playing contests wherein endurance is key and/or frequent animals-to-animals or animal-to-object physical contact is made.

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Hunter-Jumper: Animals kept for or used in competitive hunting and jumping contest held by equestrian associations for which performance standards are kept and jump heights that exceed 4 feet.

Performance: Animals kept for or used in competitive exhibitions of a moderate athletic level such as roping, steer wrestling, hunting or jumping less than 4 feet.

Pleasure: Animals kept for the purpose of private non-competitive riding.

Racing: Animals used in competitive racing events wherein running speed is key.

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Rodeo: Shall mean rodeo stock such as timed-event cattle, bucking horses and bulls.

Show: Animals kept for or use in competitive exhibitions or either a non-athletic or nominal athletic nature, such as western pleasure, parading or show ring riding.

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Walking Horses: Animals trained to perform in unnatural gaits and walking styles characteristic of the “Tennessee or Plantation Walking” style using padded shoes and or chains.

Barrel Racing/Pole Bending: Animals used primarily for those moderately athletic rodeo events.

Halter: Breed, confirmation, soundness and quality of individual horses are evaluated. Horses are shown with a leather halter are traveled before the judges so soundness can be evaluated.

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Equine Risk Management Basics

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Equine Risk Management Basics Intent

Identification, Assessment and analysis of risks

Review of risk management in place to avoid, minimize OR eliminate unacceptable conditions that could pose a danger and risk to humans or the horses

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Equine Risk Management Basics Understanding what the insured is “really”

doing Competitions/Events Racing/Showing Training/Boarding/Breeding Public/Private Stables Agricultural/Farm Activities

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Safety Issues

Agricultural/Horse Farm Safety Driver/Whip & Rider Safety Client/Customer Safety Facilities/Management Safety Event/Racing Safety Equine Transportation Barn Safety Equine Bio Security

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Understand & describe key areas of the application

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Eligibility—General Questions Type of operation? i.e. personal/family use only,

breeding stock for family business, boarding, riding, training, riding lessons, breeding with non-owned mares or stallion coming into facilities, etc.? (Number of horses on site, owned, boarded?)

Breed(s) of horses? Discipline(s) used/trained for? i.e. cattle work, pleasure, 4-H,youth shows, open shows, registered shows, trail riding, team penning, racing, rodeo events, rodeo stock, sale.

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Eligibility—General Questions Number of years the insured has owned

or managed the operation? Do they own all tack? If no, give details. Is there a manure pile? If yes distance

from building(s) and/or combustibles? Do they have inside hay/alfalfa storage?

Own or purchase? Volume and location?

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Eligibility—General Questions Distance to nearest neighbors, sub-division, fire-

hydrant and towns/cities? Number of full time employees? Number of part

time employees? Number of hired trainers on site?

Is workers compensation policy in place? Does the owner transport owned horses to show,

sale, parade(s), etc? Does the insured transport non-owned horses to

shows, sales, parades, etc? Are limited liability signs posted?

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Eligibility Business Sales and Storage Occupancy by

Insured Endorsement, the risk could be ineligible if any of the following activities are performed for others: Horse training Horse renting Horse breaking Horse shoeing Public riding Stud service

A liability charge per boarded horse, pony, mule or donkey applies: Any …………………. or both - liability with farm

personal property or farm outbuildings or both The maximum number of charges for horses, ponies,

mules or donkeys is ……………………… requires a Loss Control survey before coverage may be bound

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Application (Attachment #1) Applicant Section

Animal information (name, age, registration #, use, breed, date acquired, how acquired, purchase price)—see rates

Coverage Selection (Full Mortality, Theft, Major Medical, Surgical, Loss of Use, Named Perils, Optional Perils)

General Information section


Understand & Describe Key Areas Of The Policy

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Polling Question #3

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Which of the following is a Covered Cause of Loss on a Full Mortality Policy?


Livestock Mortality Insurance Form of non-guaranteed renewable term

life insurance on valuable animals, primarily horses and cattle.

Full Mortality provides coverage for any natural or accidental death including theft and emergency colic surgery expense (horses only) up to $2,500.00.


General Exclusions Intentional destruction of animal, unless

authorized for humane reasons by The Hartford.

Depreciation in value due to an animal becoming unfit or incapable of fulfilling it’s functions or duties.

Pre-existing conditions. Loss of any animal not under daily care &

supervision. Governmental destruction.


Animal Mortality – Limited(Named-Perils) Not as broad as Full Mortality Animals have to die from a listed peril Perils include: Fire, lightning, windstorm,

hail, theft, collision and upset while in transit, accidental shooting, drowning, artificial electricity, attack by dogs or wild animals, etc.


Animal Mortality - Limited

Exclusion under the Animal Mortality – Limited Coverage Form: “We will not pay for the loss of any animal which is: in transit to or from, or located on the premises of a racetrack, fair grounds or a show ring”. Can buy back coverage for an additional $.35.

Coverage may be written to exclude optional additional coverages, which include the hazards of drowning, physical attack by dogs or wild animals and collapse of buildings. Standard rate of $1.50 may be reduced by $.25.


Polling Question #4

As a general rule, the maximum amount of insurance allowable on a horse is?

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Insurable Values

As a general rule, the maximum amount of insurance allowable is the purchase price

The Hartford will take into account appreciation in value resulting for show/performance records, breeding records, training fees paid to date.

Animals that are born and bred, will be limited to 3 times the stud fee paid.


Rating - Horses

Horses under 2 years of age will be rated by their age.

Horses over 2 years of age through 16 years, rate is based on the use of the horse.

Rating is available on horses over 17 years of age. Limited to renewal business and subject to additional underwriting.


Aggregate Deductible Program

• For schedules of 8 or more animals, valued in excess of $100,000.00 total, a reduced rate is available in consideration of an annual aggregate deductible equal to the schedule premium amount.

• No single animal’s value may exceed 30% of the total schedule value.

• Camelids (Llamas/Alpacas) not eligible.


Example: Aggregate Deductible

Deductible Schedule Worksheet

Animal name/ID Breed Age Sex Use Amount Rate Prem. 60% rate Ded PREM

Achantress Paint 1 yr Mare R/R $7,500 3.50% $262.50 2.10% $158

RH Honest Decision Paint 3 yrs Mare Breeding $40,000 3.95% $1,580.00 2.37% $948

Cluen Around QH 5 yrs Mare Breeding $15,500 3.95% $612.25 2.37% $367

OT Cool Girl QH 7 yrs Mare Breeding $15,500 3.95% $612.25 2.37% $367

RH Lucky Array QH 8 yrs Mare Breeding $15,500 3.95% $612.25 2.37% $367

RH Memphis Queen QH 4 yrs Mare Breeding $15,500 3.95% $612.25 2.37% $367

RH Rosey Array QH 6 yrs Mare Breeding $15,500 3.95% $612.25 2.37% $367

DB Lucky Imprinted QH 6 yrs Mare Breeding $15,500 3.95% $612.25 2.37% $367

Total

$140,500 $5,516.00 $3,310

ave rate 3.93%

Agg Ded % 2.36%

Agg Ded$$ $3,309.60


Policy Named insured and address

Policy period

Policy number

Schedule (describes item #, name & registration #, breed, age, sex, use, rate, amount of insurance)


Policy

Key sections of the policy Property Covered and Amount Insured Exclusions & Exceptions A. Company Agrees to Destruction B. & C. Animal suffering excessively

due to disease or injury Company maintains right to post-

mortem at insured’s expense


Policy

2.A. Surgical operation 2B. Administration of Medication (vet or

experienced personnel directed by him) General Conditions, Theft & Removal

Clause Immediate Notice


Policy—General Conditions

1. Condition precedent is in “...sound health and free from any illness, disease, lameness, etc”

2. Insurance shall cease when insured sells it or parts with any interest in it whatsoever, whether temporarily or permanent.

3. Claiming race clause4. Surgical notice clause5. U.S. & Canada & purpose specified

Theft & Unlawful Removal Clause


Polling Question #5

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Understand & Describe The Endorsements Available

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Endorsements

Surgical Major Medical 12 Month Extension Loss of Use Accident, Sickness & Disease (AS & D)

Fertility Exam Accident, Sickness & Disease Endorsement


Endorsements

Specified/Limited Perils Endorsement (Attachment #9)

Agreed Value Trip Transit/Berserk Prospective Foal


Accident, Sickness & Disease

Clinical Exam

Breeding Evaluation

Semen Evaluation


Accident, Sickness & Disease

During the policy period it becomes permanently, impotent, infertile; or incapable of serving mares.

Incapacity must result from an accident, illness or disease which occurs after the effective date of endorsement.

Satisfactory Fertility Exam Certificate must be received before coverage can begin


Surgical Expense

Provides for up to $5,000 of insurance for surgical expense incurred to save the life of an insured animal, when surgery is required as a direct result of an accident, injury, sickness or disease. Coverage applies to horses only.

An additional premium of $150 is charged for each animal to which coverage applies.

Premium charge for this coverage is fully earned upon issuance.


Major Medical Expense

Major Medical Expense Coverage provides for up to $5,000, $7,500 or $10,000 of insurance for medical and surgical expenses of a veterinarian associated with a covered animal, when such expenses are a result of accident, injury, sickness or disease. Coverage will NOT be offered on cattle or flat-track racers.

Additional premium of $200, 250 or $350, depending on the desired limit of coverage, is charged for each animal to which coverage applies.

Coverage is subject to a $250 deductible per claim.



Extended Renewal Protection Extended Renewal Protection permits

renewal of coverage on a designated animal without the need for a current veterinarian's health certificate, if the renewal is for the same “use”.

Additional premium for this charge is $30 per covered animal.


Loss of Use Loss of Use covers an animal that becomes

unfit for the primary “use” specified for it in the policy due to accident, injury, sickness or disease. Coverage for such loss of use is provided for 60% of the applicable limit of insurance.

Additional premium charge for each animal shall be computed by applying a rate of $3.00 to the limit of insurance applicable to the animal.

Requires written results of radiographs no more than 30-days old taken of horses front feet and both hocks.


Loss of Use

Insured retains all rights to salvage if claim is paid under this coverage form, company does not take possession of animal.


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Loss of Use - Limited

If Covered Animal becomes unfit for the first “use” specified for it in the policy due to accident or injury, coverage for such loss of use is provided for 60% of the applicable limit of insurance.

Additional premium charge for each animal shall be computed by applying a rate of $2.25 to the limit of insurance applicable.




Accident, Sickness and Disease

Accident, Sickness and Disease provides coverage on a proven stallion for loss of breeding ability due to Accident, Sickness or Disease.

Payment amount is the applicable limit of insurance as shown on the Declarations page or endorsement.

Additional premium charge for each animal shall be computed by applying a $1.00 to the limit insurance applicable to the animal.




Other Coverage Options

Short Term Sale, Exhibition & Show Coverage.

Single Trip Transit Coverage.

Coverage Territory Extension


Short Term Sale, Exhibition & Show Coverage

Short Term Sale, Exhibition & Show Coverage is short term mortality coverage that is available for animals that are actually being sold, shown or exhibited. Short term policies provide NO coverage for loss resulting from calving, parturition or abortion.

Coverage can be written for Full Mortality or Animal Mortality-Limited and is subject to same underwriting as annual policies.

Rates Including Transportation:

Policy Period Full Mortality Mortality – Limited

1 to 15 Days $1.00 $ .4016 to 30 Days $2.00 $ .8031 to 60 Days $2.50 $1.00 61 to 90 Days $3.00 $1.60


Single Trip Transit Coverage Single Trip Transit Coverage is provided for animals while in the course of transit,

on a single trip basis. Coverage is effective when animals are loaded and ceases once animals are unloaded at final destination. Single trip provides NO coverage for loss resulting from foaling, calving, parturition or abortion. Coverage can only be provided for the owner of the animals whom have an insurable interest. NO coverage is provided for a common on contract carrier.

Rating:

Length of Trip Full Mortality Animal Mortality – Limited

Up to 250 Miles $ .50 $ .20251 to 500 Miles $ .75 $ .30501 to 1,000 Miles $1.00 $ .401,001 to 1,250 Miles $1.50 $ .601,251 to 1,500 Miles $1.75 $ .701,501 to 2000 Miles $2.00 $ .80


Coverage Territory Extension

Endorsement modifies insurance under your Animal Mortality Coverage Form. Extends Coverage Territory, of the General Conditions section to include additional country where animal will be traveling/stabled.

Example: Coverage Territory is extended to include: Germany.

Additional premium charge for each animal shall be computed by applying a rate of $1.00 to the limit of insurance applicable to the animal.



New Business When submitting new business we will require

completed and signed application no more than 30-days old. If insured is requesting full mortality we will require updated vet statement in addition to application no more than 30-days old or health statement if applicable.

If insured is requesting a limit of insurance over their purchase price we will require a substantiation of value form along with the above for underwriters review. Substantiation of value may also be requested by company if value of animal is over $30,000 and not newly purchased.


Endorsements

Animals can be endorsed onto insured’s existing policy but will require same documentation as new business.

To add a new animal we will require completed and signed application along updated vet statement (health statement if applicable) no more than 30-days old for underwriters review.


Renewals

Renewals are NOT automatic. The Hartford will send out renewal questionnaire’s to the agent 60 to 90 days in advance. Based on tort requirements we may need to send notification directly to insured regarding increase in premium or decrease in coverage. Copy of documentation will also be sent to agent along with renewal questionnaire and renewal notice advising of changes.

In order to renewal we will require completed and signed renewal questionnaire be forwarded to our office prior to expiration date of policy. Questionnaire’s received after the policy has expired will require re-write of the account with new application and vet statements if required.


Specified Perils Policy

Perils: Fire, lightning or smoke Collision Collapse Windstorm (cyclone, tornado, hail, aircraft &

falling objects) On board or being loaded from an aircraft (Excluding Berserk) No Examination Cost--.5%--1% of Insured value

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Equine Insurance 1 The webinar will begin shortly. There is no audio at this time. This presentation is being