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Friday, December 13, 2013

Workers Compensation Insurance in the thoroughbred racing industry - next target for reform?

We just had a horrific experience trying to help a trainer obtain Workers Compensation insurance in the state of Florida. Despite having a perfect insurance paper trail for many years in another state, it took him ONE MONTH to navigate the process of getting insurance in Florida. It took that long despite a very helpful Florida agent who was the go between for the underwriter and the trainer as she methodically asked for each piece of documentation required by the underwriter.

Trainers are busy people who do not generally spend all day in the office, on the computer and phone to take care of this kind of problem, so I offered to help. What I learned about Workers Compensation insurance was eye opening. I heard from several people that some states/racetracks have an insurance pool for trainers to make it much easier to satisfy track requirements. This is only hearsay, but I heard that the horsemen's organization in Louisiana handles the insurance pool, and trainers just hand over some $ and they are done. If anyone can shed light on this insurance pool and how it works, I would appreciate some information.

For Florida, no less than 15 emails were exchanged between trainer and insurance agent, and no less than five long phone calls to the trainer's "old" insurance company to obtain documentation required by the new insurance company. Part of the problem was a certain amount of obstruction by the "old" company, which is such bad business. After all, the trainer will need his old policy again when he returns from Florida in the spring.

Another thing that I discovered in Florida is a company that provides WC insurance to a trainer if the company is hired to run the stable's payroll. Good idea except for the requirement of this company that the trainer turn over control of his or her checking account. Plus the trainer must sign a contract giving the company the right to withdraw funds at any time in any amount with no binding terms for ending the agreement. Before doing something like this I'd say get a lot of references from the company's current and former clients.

Worker's Compensation insurance is incredibly expensive, and varies depending on the size of the stable and number of employees. All aspiring trainers should beware that a PERFECT paper trail showing that payroll is done "by the book" is mandatory. So before considering a career training horses at the track, carefully consider how much $ Workers Compensation insurance - and a reliable bookkeeper - is going to cost!