Underinsurance is a significant concern for those in Ireland’s equine industry, including horse trainers, breeders, stable owners, and riding schools. As operational costs rise and assets appreciate, many businesses risk falling short of adequate coverage. In 2025, this issue is set to become even more pressing, with inflation driving up the replacement value of property, horses, and equipment. If your insurance doesn’t keep pace with these changes, the financial implications can be severe.
The Hidden Dangers of Being Underinsured
Being underinsured means your policy does not fully cover the value of your assets or the potential costs of claims. For example, a stable worth €500,000 that is insured for only €300,000 leaves a €200,000 gap that the business owner must cover in case of a total loss. Similarly, if a high-value horse under your care is injured or lost and your insurance policy doesn’t reflect its true value, the resulting costs could cripple your business.
Public liability risks also grow when businesses underestimate the potential costs of third-party claims. If a rider suffers a significant injury during a lesson and the settlement exceeds your liability coverage, you could face substantial out-of-pocket expenses. These scenarios highlight why regular policy reviews are essential.
Contributing Factors to Underinsurance
Rising Costs: Inflation affects not only the value of physical assets but also the cost of claims, including veterinary care, legal fees, and property repairs.
Asset Changes: The acquisition of new horses, equipment, or property often goes unreported to insurers, leaving gaps in coverage.
Complex Operations: As equine businesses diversify into new services, such as offering training programs or hosting events, their insurance needs evolve. Without updating policies, these activities may fall outside the scope of existing coverage.
Consequences of Underinsurance
Underinsurance can lead to severe financial strain, especially during an insurance claim. Many insurers apply the “average clause,” which reduces payouts in proportion to underinsurance. For example, if your property is underinsured by 20%, your claim payment may be reduced by the same percentage, leaving you to cover the difference. This can have a devastating effect on cash flow and operational stability.
How to Mitigate Underinsurance
Regular Policy Reviews: Conduct annual reviews to ensure your coverage reflects the current value of your horses, equipment, and property.
Professional Valuations: Engage experts to appraise the value of your assets, especially high-value horses or specialised facilities.
Tailored Coverage: Work with equine insurance brokers who understand the unique needs of your industry. A customised policy ensures your business is comprehensively protected.
Transparent Communication: Inform your insurer of any significant changes to your business, such as expansions, new services, or acquisitions.
Clear Insurance Ireland: Helping You Stay Fully Protected
At Clear Insurance Ireland, we understand the complexities of the equine industry and the risks of underinsurance. Our team works closely with horse trainers, breeders, and stable owners to provide bespoke policies that evolve with their businesses. By addressing potential gaps in your coverage, we help you avoid the costly consequences of underinsurance. With our expertise, you can safeguard your business and focus on achieving success in 2025 and beyond.
Ensure your business is fully covered—contact us today for a policy review and expert advice.
For more tips or to review your insurance needs, contact Clear Insurance Ireland today. Protect what matters most this winter.
