Swiss Re unit doesn’t have to pay out on racehorse’s death

A federal judge in Lexington, Kentucky has ruled that a Swiss Re subsidiary does not have to cover the death of a racehorse on May 2021 caused by a reaction to supplements designed to “increase his interest in breeding”

The judge in Cypress Creek Equine LLC v. North American Specialty Insurance Co said exclusions requiring proper care and prohibiting the use of unauthorised medications barred coverage for racehorse breeder Cypress Creek Equine.

Cypress Creek obtained policies from North American to cover racehorse Laoban from March 2016 through 2021. The insurer denied coverage for the stallion’s death, prompting Cypress Creek’s lawsuit.

Cypress Creek said the policies were ambiguous and that it reasonably expected coverage because terms such as drug, medication and proper care were not defined, court records show.

The parties filed competing motions for summary judgment concerning the application of policy exclusions regarding proper care and the use of unauthorised medications.

The judge said the failure to define drug, medication and proper care did not weigh in favour of coverage because the court could use the ordinary meaning of the words to decide coverage issues.

The judge then said that the supplement, called Black Shot, given to Loaban could be considered a medication, and therefore trigger the exclusion, because its warning label described it as a drug that should only be administered by a veterinarian.

The unauthorised medication exclusion also said that injections should only be used as a preventive measure or to treat an accident, sickness or illness, the judge said.

The judge further found that administering an unnecessary medication was not proper care.

Representatives for the parties did not respond to requests for comment.

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