I recently gave my four-year-old gelding some well-deserved time off from the track and sent him to a nearby farm, where he was to be turned out on a daily basis for about two months. Two weeks later I received the horrible news that my horse suffered a career-ending injury at the farm when he got loose from his handler, ran about the property, and stepped into a gopher hole. Is the farm liable for this accident? Are they required to carry liability coverage, and if so, will this insurance reimburse me for the value of my horse?

A farm would be liable for damages to the horse only if "negligence" was found. And while farms are not required to carry liability insurance, many do in the form of "care, custody, and control" insurance. Care, custody, and control insurance protects farm owners only up to their policy's limits, and thus may not cover the total value of top horses.

In the above scenario, the horse owner might have a claim against the farm for negligence. If the farm carried care, custody, and control insurance, the farm's insurance carrier may investigate the claim and determine whether it should be paid or denied. If denied, or if the farm did not carry such insurance, the owner could then file his or her own suit against the farm.

If the courts find the farm liable for the accident or injury, the insurance company would pay the claimant for damages up to the policies limits. If the animal's value was greater than the policy's limits, the owner could then pursue the farm for the additional amount. And if liability insurance was not in place, the farm would be directly held accountable for paying damages.

The determination of legal liability surrounding negligence is complex, and involves a rather fact-intensive analysis.

The first question is whether a boarding contract was signed that legally limits the farm's liability for negligence. While a farm cannot completely absolve itself from damages caused solely by its own negligence, the farm can contractually limit its liability for such damages if its contract contains the legally correct language.

Assuming such a contract does not exist, or is ineffective, and further assuming that you agreed to pay board or some other compensation to the farm for keeping your horse, the farm has a duty to physically inspect its property and repair any dangerous conditions, including gopher holes. If the farm failed to inspect the property and fill in the gopher holes, it should be held liable. If the farm did inspect the property, it may or may not be held liable depending upon how much time elapsed from the time the property was inspected to the time your gelding stepped in the gopher hole. If it was an unreasonably long time, the farm may be held liable.

To determine the reasonableness of the amount of time since the farm was inspected, the court will consider the size of the farm, whether the farm had a history of gopher holes, what efforts were made in the past to either fill in the holes or ensure that no horses could enter the area where the holes were located, or to remove the problematic gophers.

Fundamentally, the judge or jury will try to determine whether efforts made to inspect the property and ameliorate any dangerous conditions were reasonable, given the magnitude of the risk of damage or injury. Considering the consequences of an injury to your horse, it is generally a good idea to discover whether the farm is adequately insured to cover the value of the horse in the event of a misfortune. Likewise, it is important for farms to ensure that they have the appropriate coverage in the event an accident occurs on their property.

(This article first appeared in the July 2000 issue of Owner's Circle and is reprinted with permission of Thoroughbred Owners of California )

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