As a boy of 12, Charles (Chuck) Williams loved to ride his pony in the hills and by the stream that ran along Arroyo Seco near the family stable. The Pasadena Freeway had not been built, and the 3 3/4 acres that his grandfather purchased in 1906, near what is now the York Boulevard Bridge at the border of Los Angeles and South Pasadena, was still considered "the country" by folks in the city.
"The whole area was very heavily wooded, and he'd take his little hand ax and chop wood and cut trails," Margaret Williams, 77, said of her husband, who died six years ago.
Those trails that Williams began cutting as a boy forged the way for the riding trail that was the backbone of the stable business he started in 1926.
People could keep their horses at the stable, or take lessons, but most of Williams' business came from city folk who would rent horses and ride them on the trail. The horse rental business flourished over the years, grossing $82,000 for Margaret Williams last year. But the trail riding, which had accounted for 25% of the stable's business, stopped in March.
That is when the company that insured the Arroyo Seco Stables told Williams that it could no longer provide liability insurance on rented horses taken out on the trails, which lead to Angeles National Forest. Riders can continue to rent horses, but the Arroyo Seco Stable's insurance covers only those who ride within the stable grounds.
"The insurance companies say trail riding is an accident waiting to happen," said Williams, who has been forced to get rid of half of her rental horses since her trail-riding coverage was suspended.
Although business has fallen off sharply, her family legacy has kept Williams from selling the stable.
"As long as I'm alive, I'm not going to sell it," Williams said. "I'm hanging in there as long as I can."
Williams is one of a dozen or so stable operators in the San Gabriel Valley--and hundreds across the nation--who will no longer be able to let riders venture out on the trails.
Like others, Williams lost her trail-riding insurance not because of specific suits, but because of problems the industry faces as a whole, according to an agent for London American General Agency, the firm that handles Williams' business. Williams can remember only one minor suit being filed against the stable.
Orange County-based London American, a major insurance wholesaler that specializes in insuring horse businesses and still covers Williams' general stable operations, began suspending coverage on trail riding in August, 1984, saying that it was paying out far more than it was taking in on claims related to trail riding accidents. According to Jay Taormina, an owner-partner with London American General Agency, his company suffered a 1,710% loss ratio in that category in June, 1984, meaning that for every cent the company took in from premiums, $17.10 was paid out in claims.
The average trail-riding settlement runs about $4,000, and the company paid 92 claims in its rental horse category of insurance last year, Taormina said.
Taormina said poor management by stable owners is partly to blame for the policy cancellations. As an example, he cited a case in which his company paid a $32,000 claim to a woman who rented a horse.
Wearing High Heels
He said the woman was wearing high heels and broke her ankle while dismounting.
"That's an example of bad management," Taormina said. "That woman should have never been allowed to go horseback riding in high heels. But that horse operator needed that 10 bucks so damn bad he just took a chance."
Stable owners are not the only people facing what is regarded as a widespread insurance crisis. Businesses and governments big and small are all scrambling to find liability coverage for products and services as insurance companies raise rates, or, in some cases, cancel coverage altogether.
"The insurance companies are a lot more fussy about whom they will accept, and there have been some sharp increases in premiums," said Harvey Seymour, a spokesman for the Insurance Information Institute in New York.
He said that insurance companies are raising premiums or canceling policies because of what insurers say is the propensity of judges and juries in recent years to award big settlements. The combination of large awards and a cash flow problem resulted in a $5.4-billion operating loss for the property and casualty industry last year, Taormina said.
However, trial attorneys contend that there is no crisis.
"As far as I'm concerned, it's been completely manufactured by the insurance industry," said Tom Frankovich, a personal injury attorney who has handled several horse-related cases. "I think what they're attempting to do is scare the public into believing there is a crisis that doesn't exist" so that laws governing liability will be changed to favor defendants in liability lawsuits.
For stable owners, insurance problems often mean heartache and financial despair.