How To Insure A $120 Million Horse

The Kentucky Derby is upon us and insurers are more than just spectators at this major sporting event.

Bloodstock and equestrian insurance is big business with underwriters who specialize in offering tailored protection for high value animals.

Consider the staggering values at stake. A BloombergBusiness article by Mason Levinson tells the tale of American thoroughbred racehorse Tapit.

Tapit began his stud career with an initial stallion fee of $15,000. That fee has soared 20-fold in the past decade and in 2015 Tapit will generate over $30 million for his owners.

Why?

Tapit’s offspring tend to win races.

As Bloomberg reports:

By 2009, his offspring’s racetrack earnings placed him 28th on a national ranking of stallions, according to data compiled by the Bloodhorse. He climbed to 12th the next year, then third in 2011 and first in 2014, a position he has maintained over the first four months of this year.”

One of Tapit’s sons, Frosted, is a top contender in Saturday’s Kentucky Derby.

Today, Tapit’s total value is estimated at about $120 million, the article reports.

Luckily, there’s insurance for that. Whether you own racehorses, stallions, broodmares, or showjumpers, insurers are able to tailor a policy that meets your needs.

A bloodstock insurance policy typically would cover a number of different risks.

For example, all risks mortality would cover the value of the animal if it dies as a result of accident, disease or illness. Theft can also be covered, as well as loss of use (covering financial loss) and public liability.

If you run an equine breeding program, permanent infertility insurance is another important coverage. Stallions are the “calling card” of a major farm and can be synonymous with the farm’s name and reputation.

If a stallion becomes permanently impotent, infertile, or incapable of serving mares, it can be a huge setback for the owner, breeder or shareholder. This important coverage protects one of their most valuable assets.

Perhaps one of the most high-profile equine insurance claims over the years involved the death of thoroughbred Alydar in 1990. Check out this Blood-Horse feature article by Tom Dixon, the Lloyd’s of London insurance adjuster who was first on the scene when Alydar was found in his stall at Calumet Farm with a broken leg.