What would you do if someone else's pet got hurt in your care?

Last week, I had a dog stay with me. This was an adult dog, pretty calm in general, no behavior issues. He arrived at 7 am and stayed until 3 on four consecutive days.

After he was picked up on his last day, the owners called me. Their dog needed expensive veterinary care because he had swallowed an object, presumably plastic, and it got stuck in his intestines.

Some context: I’ve taken care of dozens of dogs, and they were all returned safe and sound. The dog in question was right with me all day, except for three hours. Those three hours I was out, but the dog was in a room that’s the maximum amount of dog-proof. It has some closed shelves and a piano in it, and then a dog bed, a water bowl, and some (owner-approved) chew toys.

I don’t think I did anything wrong. The owners signed a contract saying that their dog is allowed to spend a few hours by himself – and that, in the event of injury, they’re liable.

And yet, they want me to pay their 300$ vet bill.

What would you do?

PS: The dog, fortunately, is recovering. He’s a really sweet guy and I’m so relieved.