Insurance: Don’t put your head in the Sand
In my last article we ran the numbers, and worked out what you need to live the life you want, and how you can structure your business around creating that income for you.
While there is a lot of discretionary spending when it comes to getting yourself started out as a professional, the one area where you simply cannot and must not scrimp on, is your insurance.
Put simply, if you cannot afford to be fully insured, you cannot afford to be in business. There are too many implications for you, and possibly your family in the event that something goes wrong.
Working with horses is a risky business
I asked event rider, trainer, equestrian business owner and Insurance Broker, Jenny Manuel to explain further.
“One of the main considerations a rider needs to consider is does their insurance policy cover them for everything they do as part of being a rider?
“Activities often include coaching students on their own horse, or a school horse, running clinics and providing agistment services. All of these activities provide different risk exposures for the insurer, so it’s important that they are clearly outlined when applying for cover.”
Most riders are aware of Public Liability Insurance, where the policy covers you and your business for losses or damages a third party suffers (or claims to have suffered) as a result of your business activities. Professional Indemnity Insurance is not so widely know, and covers advice-based businesses from legal action taken for losses incurred as a result of professional negligence. If you are operating in a professional sense, you may potentially need both covers. Income protection may be worth investigating as well, particularly if you are riding and the business relies solely on you being able to physically get out there to work.
“Having the appropriate PL and PI policy can save you thousands of dollars in the event of a claim, “ says Jenny. “Often when a person finds themselves in a situation where they are being sued, the defense costs alone can be more expensive than the claim in damages itself. As insurance brokers we see this occur on a regular basis. At fault or not, you still have to defend yourself and the legal costs to do so often mount into the tens of thousands even for small claims. If you don’t have adequate insurance cover, you will be up for these costs out of your own pocket, which in many cases can be financially crippling.”
Many riders and coaches will opt to take the standard insurance recommended by the EA or their other association preferred insurer. While this can be cost effective, as a professional rider, you may find that the cover is not as comprehensive as you require.
“For example,” says Jenny. “Some policies will only cover you to teach riders at a level that you are qualified at regardless of your experience, so anything outside the scope of this may be enough for the insurer to decline a claim.
“For example, you may be riding and competing as at Grand Prix dressage rider, but qualified to teach only up to Novice. If you are teaching anything above this level, you may be doing so uninsured. Often the insurer can extend your cover, however this needs to be negotiated on a case by case basis.
“Understanding the different insurance products can be confusing and complex, and it is recommended to seek the advice of an insurance broker who is experienced in this line of risk.”
It seems expensive, confusing and convoluted, but the consequences for not getting this right can be life changing should something happen. It seems a cliché, but it pays to plan for the worst so that you can really enjoy the best that your daily work has to offer you.
This article was written by business coach and mentor, Anita Marchesani from getupandgallop.com.au with the help of Jenny Manuel of SRG Corporate Insurance. For advice in regards to insurance in your particular situation, please email [email protected]
