FINANCIAL NEGOTIATIONS In a lease, typically the lessee pays a fee for the use of the horse, plus the horse’s board, training, shoeing, veterinary and insurance costs. Natalie describes how it works at her riding school. “Riders who lease have set days. The horses are still teaching lessons, so it’s not 24/7. And I will half-lease a horse twice if it works for two people to share.” Natalie charges $600 monthly for a lease. “That includes one lesson a week, and their part of board and shoes. And if I lease a horse for a client—if she’s sick or can’t pay her bills—the lessee pays the same amount, and the lessor gets $400 of that. The idea is that we’re supervising the horse at our barn.” Working with junior and young riders, Jodi has found that the leasing option helps parents adjust to finances. “Sometimes parents don’t want to put out the initial investment price on a horse. If leasing is the opportunity, then I find parents are generally more receptive. And once you’ve worked horses into your lifestyle, then the costs aren’t so daunting.” In the hunter-jumper realm, actual leasing fees vary greatly, depending on the horse’s intended use. Hunters, jumpers, equitation horses and pony hunters can lease for substantial amounts. Parents of juniors aiming for championships or equitation finals will often pay top dollar to lease proven winners. Lisa explains, “We have a discussion of how much they are willing to pay and how much it takes out of the life of the horse. There’s a risk that the horse could be overutilized or get sour.” Then she adds, “It is the rare horse you can make money on. With ponies you can, but with horses it’s tough to keep
Horses Unlimited’s stallion Pik L has been leased to young riders.
is that it’s a risk. Normally, the lessee is required to carry and pay for an insurance policy for the leased horse. However, sometimes the lessor is the policy holder as part of their agreement. Policies are generally either 30 days long (short term) or annual (long term). Cindy Anderson, an experienced insurance agent at Blue Bridle Insurance in Pittstown, New Jersey, and a rider herself, has some valid points to consider when leasing sport horses. “First and foremost, a very good lease contract needs to be negotiated for the protection of both parties,” she advises. All insurance policies that they write must have a copy of the lease contract with it. “And how the insurance is handled should be spelled out in the lease agreement. We are not attorneys, so we always advise that clients have an attorney review the contract.” In general, if the horse becomes ill or injured, for medical claims, the payee to be reimbursed is most likely the lessee. In the case of death of the horse, for mortality coverage, the claim is usually paid to the “Loss Payee” which is most likely the horse’s owner (the lessor). “Where things become muddy is when the horse, for example, is returned to his owner not in ‘like’ or ‘said’ condition.
Insurance Considerations W
Sometimes the horse becomes lame or his training suffers a big set back. These are the tough, gray areas that should be dealt with in the contract up front.” Cindy adds, “For some insurance companies, a ‘Loss of Use’ policy requires that after the pay out on a claim, the company retains ownership of the horse. So be careful when signing up for that type of coverage.” In her experience, for every 100 policies that Blue Bridle writes for leased horses, only a handful run into trouble. “We’ve
written policies for all kinds of leased sport horses, from reining, to jumpers, EQ horses, to Grand Prix dressage. People lease horses for lots of different reasons which is usually a win-win situation for everyone. Although it’s always a risk, one way to minimize that risk is with insurance and a good agreement.” (Cindy can be contacted at
cindya@bluebridle.com.)
92 January/February 2012
hen a horse is leased, whether it’s a free lease or for a fee that’s in the six-figure range, the lessor (the horse’s owner) is handing over a big responsibility to the lessee for the care, maintenance and training of the animal. Bottom line
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