Recently the Supreme Court (our highest court) reversed previous settled case law. The case concerned the answer to the question of whether a liability insurer had to pay compensation in a dispute between a riding school and its liability insurer.

Policy conditions

While taking an outdoor ride with several participants on horses from a riding school under the guidance of someone from that riding school, a number of horses bolted and were frightened by a mountain biker. One of the participants fell and suffered serious injuries. The riding school was sued for compensation for the personal injury and had to pay 50% of it. The riding school then contacted its liability insurer to compensate the damage. The policy conditions of the riding school owner’s liability insurance included a so-called rental clause. It stated that liability for damage when renting horses for outdoor rides was only insured if it was demonstrated that (i) the rental of the horse takes place under the supervision of a certified instructor or trainee and (ii) the renter has an FNRS diploma, a KNHS membership card or a rider’s license from the Recreation Rider Foundation. These conditions were not met on this outdoor ride.

Primary coverage description and preventive warranty conditions

Until recently, the Supreme Court made a distinction between provisions in the policy conditions that contain the ‘primary description of the coverage’ (for example: compensation for damage as a result of injuries sustained during an outdoor trip) and clauses that contain a condition under which the coverage lapses (for example: : no coverage if no certified instructor and/or no FNRS diploma, KNHS membership card and/or no rider’s license). The latter conditions are also called ‘preventive warranty conditions’. This distinction was made because the Supreme Court found that in the case of preventive warranty conditions, an appeal by the insurer to such a condition whereby coverage lapses is unacceptable according to standards of reasonableness and fairness if there is no causal link between the violation of the condition and the risk as has been achieved. In other words: even if those conditions had been met, it would not have prevented the damage.

Supreme Court ruling

The riding school was of the opinion that there was such a preventive guarantee condition and that the insurer could not rely on the fact that the insured had not complied with the conditions. The riding school was of the opinion that the damage had not occurred because no certified instructor led the outdoor ride and/or the rider did not have an FNRS diploma, KNHS membership card and/or rider’s license. The insurer, on the other hand, took the position that there was a primary description of coverage and that the absence of a causal link therefore did not preclude an invocation of the rental clause and therefore that there was no insurance coverage.

In this ruling, the Supreme Court considered that the distinction is not always easy to make in practice. When answering the question of whether an appeal to a condition in the policy is unacceptable in the given circumstances according to standards of reasonableness and fairness, no different approach need be taken for insurance contracts than for other contracts. In doing so, the Supreme Court returned to previous rulings in which that distinction was made.

Implications for practice

What does this statement mean for equestrian practice? Based on this ruling, insurers can and will probably decide more quickly not to provide cover for damage if the conditions of the policy are not met, even if the damage would probably have occurred if those conditions had been met. Such a position on the part of the insurer will be much less likely to be considered contrary to standards of reasonableness and fairness and will therefore succeed more quickly than before. Riding school owners would do well to study their policy conditions and see what requirements the liability insurer imposes. These requirements will then also have to be met. In this case, no outdoor rides without a certified instructor and participants of outdoor rides must demonstrably have an FNRS diploma, KNHS membership card and/or rider’s license and of course participants of outdoor rides must sign an outdoor ride/lesson agreement prior to the outdoor ride.