Question: Should a riding instructor with a small clientele forego purchasing a policy of liability insurance merely because her business is small?
Answer: Definitely not. Even the smallest business operator is at risk of litigation if a student is injured. Never assume that your state's equine activity liability act (if you're in one of the 46 states with such a law) will protect you from everything, and never assume that people who sign liability releases won’t sue.
Small lesson program operators have every incentive to protect themselves, and liability insurance is especially important. Small lesson program operators, however (such as those who only teach on weekends), might believe the cost of coverage is out of their budget. Not necessarily. Here are a few suggestions:
- Shop around for reasonable rates, but make sure that the lower rate reflects the same coverage as the higher rates and that the insurer you select is highly rated. Compare deductibles, policy limits, and exclusions.
- Be honest at all times in your applications. Don’t under-represent the scope of your activities with the hope that it might trim your premium cost. Chances are that you'll only create trouble with your insurer.
- Consider breaking down the premium cost into manageable parts and planning ways to recoup it. A $1,200 annual premium for liability insurance is $100 per month, and only about $25 a week. Instructors who give only 5 lessons a week can simply raise their rates an extra $5 to afford the coverage.
- Remember that your business insurance is not the same as your homeowner's insurance. Just because you have a policy of homeowner' insurance in place does not mean you are covered for your business activities.
Don’t expect your state law to provide a "small business operator" exception to any lawsuit you receive. The risk of liability is always present. Emphasize safety and stay protected.
Direct your questions regarding liability insurance to a knowledgeable insurance agent or lawyer.