Equine insurance experts answer your questions about insuring Thoroughbreds for the breeding and auction realms.
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QUESTION: If I'm dividing shares of my horse off into a racing partnership but still retaining interest myself, what information does my insurance company need, and how does this affect how things are billed or charged?
BRYCE BURTON: Racing partnerships, also known as syndicates, are the fastest-growing form of horse ownership and one can only assume that this trend will continue. Due to lowering the overall cost of this ownership as a result of shared expenses among partners and the mitigated risks associated with the investment, horse racing partnerships provide the average race fan an accessible pathway to racehorse ownership. One of the many bills that racehorse owners receive, if they have in fact secured their equine assets, is an invoice for their horse(s) Full Mortality Insurance premium.
The managing partner of the racehorse partnership is responsible for the communication with the insurance agent throughout the insuring process. When a horse is purchased for the partnership, the managing partner should instruct his or her agent to cover the horse for the purchase price under the legal name of the partnership. Once shares in that horse are purchased and agreements are signed, a new insured value may be set as a result of the cost of each share sold. For example, if a horse is purchased for $100,000 at public auction, the managing partner may sell 10 shares of that horse to the investors for $15,000 apiece, which would set the new sum insured value of the horse at $150,000. The managing partner will then bill each investor individually for the premium charged for their specific share.
QUESTION: Are there any other coverages that an agent should recommend to a racing partnership?
BRYCE BURTON: We recommend binding Race Horse Owner's Liability Coverage for any racing partnership, which covers the group in the event that bodily injury or property damage are caused as a result of the ownership of a horse. The manager of the partnership can easily obtain this coverage through their agent and split the relatively low cost of the policy among partners.
Bryce Burton is a property and liability specialist for Muirfield Insurance. He is from Frankfort, Ky., where he grew up an avid race fan. His Thoroughbred racing fandom combined with a collegiate internship in the insurance industry, culminated in a start in the equine insurance field. Bryce has been with Muirfield Insurance since 2014, following his graduation from Transylvania University in Lexington.
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