If you allow someone to use your sand school in exchange for help with your horses this would be deemed the same as hiring the school and money changing hands, so in short, yes you should notify your insurers. If your friend has a valid instructor’s policy it will cover them for anything for which they could be liable. However if there was a problem due to the surface of the school or a faulty gate or something along those lines there could be a claim made against you. Therefore you should ensure that you have cover in place for the hiring out of your school, even if no money has changed hands.