HO 2472: INCIDENTAL FARMING, COVERAGE FOR PERSONAL LIABILITY
Incidental Farming: Personal Liability, also known as HO 2472, extends coverage for any specified farming operations carried out within your residence’s premises or anywhere that is specifically described to be or within proximity to your insured areas.
What is Incidental Farming Coverage?
Incidental Farming coverage covers custom farming/ business activities that you, as a farm owner, might be offering, but is nowhere near the definitions of coverage for your business insurance policy or homeowner policy insurance.
What are we talking about here?
To put things more simply, let us take hobby farming as an example.
Is it within your residences or dwellings?
There are instances wherein homeowners’ policies are not suitable or even liable for what your hobby farming’s operations are doing.
In this case, you cannot be compensated or even have your insurance responsible for any damages or injuries caused by your farming operations if the aforementioned operations aren’t within the scope of your homeowners’ policy endorsements or coverage.
Likewise, you cannot hold your existing business insurance liable for answering for any costs that may have resulted from farming activities done for personal consumption, unless you have included those perils beforehand within your policy’s endorsements.
This is where Incidental Farming Coverage comes in.
What Incidental Farming Coverage Includes
Within the ‘Insured Premises’
Imagine this scenario. Farmer Ben, aside from making produce from his farm, also offers additional services such as farm tours, and even having a building within his farm rented as a venue for weddings, parties, etc., albeit unofficially and only for relatives and not as a full-time purpose for his farm.
One particularly sunny day, one of his employees calls him for an emergency: a distant relative that happened to be there while using one of his farm’s buildings as a venue for an event was injured by cattle that broke free from one of Farmer Ben’s enclosures.
Unfortunately, the liability coverage his farm insurance policy has does not include answering for injuries for any third party that is not an employee. He basically had not included coverage for any liability that can result from ensuring any other people besides his employees since accommodating people with his farm was not intended as a full-time purpose; that, or he had neglected in doing so.
He has not declared this particular activity since it was for personal operations, therefore not being able to be covered for compensating or answering for medical fees for the possible injury that might have happened within his farm during incidents.
Farmer Ben gets sued over his liability and since he was not prepared, significant financial loss resulted from the costs of his compensation for the injured distant relative.
With Incidental Farming Coverage, this hypothetical event would have been different.
Defining operations are important when it comes to getting an endorsement for Incidental Farming Coverage. Neglecting to specify one instance or possible peril that might ensue during personal-consumption operations will omit that instance when it comes to coverage.
Away from ‘Insured Premises’
Let’s use another hypothetical sample of Farmer Ben.
This time, his delivery truck, on his way to a nearby store location, suddenly breaks down after a few miles away from the destination.
A storm suddenly hit and although he was unharmed, his nearby storage building was not. The stored produce he was supposed to deliver to the market was now spoiled and are no longer fit for sale or even personal consumption.
In this unfortunate event, not only was his equipment damaged but so was his stored produce.
What was he supposed to do? This time, fortunately, Farmer Ben is now no longer a stranger to Incidental Farming Coverage.
Incidental Farming Coverage typically covers farm produce even if it was stored away from the insured premises, as long as the location was specified or even within proximity of the insured premises.
The same also goes for mobile machinery, if they are not insured or included in any specified insurance policy provisions yet. If it broke down within a set or specified proximity to the insured premises, rest assured that it would be covered, as long as it was specified.
This should also typically come in handy if you are relating to livestock or poultry that are temporarily removed from the premises. Unless defined otherwise, however, other instances may not be included.
It does not mean, though, that homeowner’s policies cannot be modified: HO 2473 or farmer’s personal liability insurance is a close variant of endorsement to that of HO 2472.
The only difference is that it covers the farmer’s liability expenses, but only when farming is not the primary profession of the insured and if the farm is away from the residence premises.
Similarities: Umbrella Insurance
The Parallelism and More
Incidental Farming Coverage works along the same lines as umbrella insurance does, but as much as it is closely alike, there is also a difference. Here’s why.
– While Incidental Farming Coverage specifies its coverage or endorsements as ‘within the insured premises’ as well as operations ‘away from the insured premises’, it may also typically include certain exclusions aforementioned in some provisions of the insurance policy.
What does that mean?
The three-word term may pop up frequently as one reads along the lines of their farmer insurance. Incidental Farming Coverage can be an entirely different provision or endorsement, depending on the insured.
Any previously excluded factors may be included here, and those particular exclusions, when specified, can be distinctly covered once enumerated within the insurance policy’s endorsements.
– The Umbrella Insurance policy typically covers for when the liability loss of the insured exceeds the cost limits of their basic policy, whereas:
Incidental Farming Coverage covers for the previously specified but unprotected factors you have.
How, then, can it be similar to an Umbrella Insurance?
– It also acts as a safety net, that is, when you specify the operations they are to be covered for, or when they aren’t already included in previous endorsements within your policy.
With that being said, what are you supposed to cover?
This should go without saying: any specifiable operations in your farm that are excluded from any existing liability policies.
While umbrella insurance policies help, incidental coverage is just what you need as it secures any particular areas you focus on.
Even more so when the additional operations can increase or even double your liability, both as a farm owner and an employer.
In conclusion, incidental coverage is a great help when you have more operations that aren’t typically covered in your pre-existing policy coverages.
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