Your Horse column – What type of insurance do I require when entering a loan agreement?

Q I am looking to loan a friend’s horse which i have been riding for two years now but I’ve never loaned before and I’m not sure where to start.

What do I need to consider i.e. what type of insurance and what needs to be included in the loan agreement? Any info/suggestions appreciated.

A You are right to be keen to ensure that a loan agreement is drawn up prior to your taking over responsibility for your friend’s horse. A loan agreement avoids any future misunderstandings (if drawn up properly and thoroughly) that may arise over issues such as payment of veterinary bills, terms of use and payment of insurance.

Having the terms of the loan documented in writing will give you legal protection in addition to peace of mind. You will be able to refer to the loan agreement should a dispute arise.

The loan agreement should stipulate for example the standard of care that you should provide to the horse and the duration of the loan. I would recommend including a clause which permits termination of the loan agreement by either party providing 1 months notice is given. This ensures that in the event that your circumstances change and you are unable to continue to care for the horse you will not be in breach of the contract should you wish to return the horse earlier than agreed.

The British Horse Society will provide you with a template of a loan agreement that you will be able to adapt to suit your requirements.

You do not state whether or not the horse is to remain at its current yard. If it is not you should confirm within the contract that you are entitled to keep the horse at the yard that you intend to move it to and stipulate who is to be responsible for the transportation (assuming that the new yard is not within hacking distance).

The agreement should clearly highlight whether or not tack is included and insurance should be in place to cover this. Insurance should also be in place to cover death, theft, vets fees, loss of use and public liability.

Either party may take out the polices but if your friend is happy to continue to pay for said cover you should ensure that the loan agreement stipulates that she is responsible for the same and have her confirm in writing that all polices are in place. I would personally insist on seeing and taking copies of said policies if you are not putting them in place. Do ensure that you are covered to ride the horse under said policy and that they are renewed at the required time.

PDF Document: Your Horse Column – What to include in a loan agreement.pdf