Workers' comp insurance
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By Denise Steffanus
Workers' compensation, like death and taxes, is a fact of life horsemen must accept. Owners and trainers are required to have workers' comp insurance to care for their injured employees. Even freelancers, such as some exercise riders and hotwalkers, need the security of knowing they will be taken care of if they are hurt on the job.
With medical and drug costs skyrocketing, premiums have soared to a level that makes it difficult for some trainers to stay in business. Geography also comes into play. Areas of the country where medical costs are the highest, such as New York, have the highest workers' comp premiums, while Kentucky is among the lowest. New York has the second-highest cost of living in the nation, and Kentucky has the second lowest.
Everyone seems to have skin in the game: underwriters, insurance brokers, state insurance departments, racetrack management, claims managers, owners, trainers, and injured horsemen. The issue is so complex that whoever you call to discuss workers' comp is likely to refer you to someone else for answers. At the end of the day, after several phone calls, you probably will be more confused than when you started.
The nuts and bolts of workers' comp
The most simplistic explanation of insurance is that the total amount of premiums collected by a plan must be adequate to pay all the claims filed against it. All employers in a workers' comp plan share the risks. The goal is for the plan to have an overall safety record so the fewest possible claims are paid out.
For a workers' comp plan to be fair and effective, trainers must report their employee rosters accurately and honestly, and all stables in the plan must operate in the safest manner possible to reduce claims. Insurance is a form of socialism, where everyone contributes to the premium pool but only a few reap those benefits when an adverse event happens. The more individuals who do NOT file a claim, the greater the safety rating for the plan, which results in a reduced risk and eventually lower premiums.
Before a company can offer insurance, it must have enough start-up assets (in money or collateral) to support anticipated claims until enough premiums come in to create a pool to pay claims. The insurance company invests a portion of those premiums to increase the plan's assets, and it may purchase insurance from a third party to protect itself against large, catastrophic claims.
Every occupation falls into a workers' compensation class code. Codes are rated based on risk, the number and severity of on-the-job injuries the class experiences. That rate determines the premium needed to insure that employee, based on demonstrated risk. Among racetrack occupations, exercise rider is the most dangerous, even more dangerous than jockey.
Trainer Rick Violette Jr., who served as the president of the New York Thoroughbred Horsemen's Association from 2008-2017, has been working on the workers' comp situation in New York since the 1990s. Violette explained that although jockeys take significant risks while performing a perilous job, statistics show that they are less likely than exercise riders to have accidents because they work in a more controlled environment—policed by outriders, followed by an ambulance, and all the horses travel in the same direction around the track. For an exercise rider, the environment can be chaotic.
"In the morning, there might be 100-150 horses on the racetrack," Violette said, "all with different experience, all going different speeds, going counterclockwise and clockwise on the racetrack, horses coming out of the gate. So when you look at that, it's pretty black-and-white how the morning exercise time is much more dangerous and fraught with injury than the afternoon."
Another problem for workers' comp coverage is that many exercise riders aren't employees of a particular stable, but rather get on horses for several trainers who pay them by the head, often in cash when they get off the horse. The extent of the trainer's knowledge about the rider might be only his (or her) first name and how well he handles a horse. If that exercise rider is injured, complications can arise when he seeks to file a claim and none of his trainers have him listed on their workers' comp policy.
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