To identify the territory of regulation and tax of a bloodstock risk, consider:
1. The nature of the cover provided;
2. The location of the insured’s residence(s) or business establishment(s) and
3. The physical location of the horse(s).
All risks mortality
Consequential financial loss and third party liability
All risks mortality insurance covers the value of the horse if it dies as a result of accident, disease or illness.
Many countries’ laws treat horses and other animals as moveable property and the risk location is where the animal is normally situated.
The main exception to the rule above is in the EEA where the regulatory risk location for moveable property is the territory where the insured is resident but the tax risk location remains the location of the moveable property.
If the contract covers horses situated in more than one territory there may be multiple risk locations.
Where the horse’s physical location is uncertain or variable, the risk location is the territory in which the insured’s residence or business establishment is located.
Please note: In some territories, e.g. Canada and the US, the location of the insured’s residence or business establishment creates a risk location irrespective of the physical location of the insured property. Consequently, if the insured property is in a different territory from the insured’s residence or business establishment, there are two territories for regulation and tax.
Bloodstock insurance may cover consequential financial loss and/or third party liability.
The risk location for both is the territory in which the insured is resident or its business establishment is located.
If more than one insured resident or business establishment is covered, then each may individually create a risk location.
Definition of 'business establishment'
European Union (EU) legislation defines the term ‘establishment’. Outside the EU the term is not so well defined, so in the absence of any contradictory guidance, it is appropriate to follow the EU approach.
Examples of business establishments:
- subsidiary companies
- branches of companies
- representative offices
- offices managed by businesses’ own staff
- tied selling agents
- factories and workshops
- mines and quarries
- oil and gas wells
- drilling platforms fixed to sea bed
Risk locator tool
Introduction to Risk LocationWhat is risk location and why is it important ?
Introduction to risk location
Establishing the risk location
To help establish risk location please consider the questions provided via the link below
Class of business guidance
To help you establish the risk location please consider the class of business
Risk Location Examples
The interaction of different territorial rules can make a given scenario complex. Applying the principles set out will assist market participants in establishing the risk location.
Lloyd's International Trading Advice (LITA)
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