Swiss Re unit need not cover racehorse’s death

A federal judge in Lexington, Kentucky, said Tuesday that a Swiss Re Ltd. subsidiary does not have to cover the May 2021 death of racehorse 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 unauthorized medications barred coverage for Midway, Kentucky-based 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 May 2021 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 unauthorized medications.

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

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

The unauthorized 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.