Measure of Damages
A critical part of any subrogation analysis is the determination of what damages are legally recoverable from a potentially liable third party. Unique to equine claims, the owner of the horse will often choose to insure the horse for less than its fair market value to avoid higher premiums. For this reason, the insured value rarely, if ever, equates to what is legally recoverable. In most jurisdictions, the fair market value of the horse is the proper measure of damages. To prove fair market value at trial, there must be a well supported opinion given by a qualified expert in the field. Although a third party may be liable for injuring the horse and rendering it incapable of performing its intended purpose, the horse may still have a significant residual value as a breeding horse or performing a new purpose. That residual value will likely be subtracted from the overall damages recoverable through litigation. In today’s climate of frequent expert challenges, choosing the right expert who can properly evaluate these issues is essential.
In addition to seeking the fair market value of the horse, an owner often asks whether he or she may seek pain and suffering or emotional distress damages for their loss. In the vast majority of jurisdictions, these types of damages are not recoverable because there is no physical manifestation of an injury to the policy holder. The owner will be limited to economic damages, which may include a claim for business interruption, loss of future breeding rights or loss of future value.
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