Liabilities of a Farm

Aug 23, 2020 | Affiliates, Business Insurance

As all businesses do, a farm business has liabilities in its enterprise, all of which depend entirely on your farming operations as well as your offered products and services.

Basically, where there might be risks that a farm owner may be held accountable for, such as areas that may cause damage or injury, and for which they are legally responsible, there would be a liability.

Products Liability Exposure

Let’s start with the main focus on any and every farm: their products. When was the last time that the consumption of your products is entirely secure and safe? Every once in a while, consumers contract foodborne diseases from spoiled meat, and while cases aren’t always reported, they can always be traced back to the product’s sources.

If your farm enterprises in the meat industry, a time might come wherein at least a small quantity of your products may become spoiled and unfit for consumption, but still slip to the market hence making it onto the plate of a customer.

If the product manages to injure or cause illness in the consumer, you, as the source of the soiled product, will most definitely be held accountable. When it comes to these circumstances, you might either be sued or held responsible for giving the appropriate amount of compensation for the ill’s medical fees. 

Whether your farm produces crops, poultry, or anything consumable, there may be circumstances wherein consuming one of your offered products may have caused injury or illness upon its consumer.

This is where adding a Products Liability Exposure endorsement in your insurance policy comes in.

In an instance, your product may have caused an injury, or illness, onto a customer, and you are to compensate for the damages, adding this coverage to your insurance policy enables it to cover for you such as paying for compensation on your behalf to the injured party, as well as defending the insured against lawsuits that may be brought by a third party that claims your responsibility for the damage, so long as it is within your policy’s coverage.

ATV (All-terrain vehicles) and Utility Vehicles

Not only vehicles but various farming equipment, as well, have been the main causes of injuries in farms. Most well-known of them are farming tractors turning over, while others include being caught in running machinery, non-highway transportation incidents and high-way collisions between farming equipment and other vehicles, and many more.

With that being said, depending on the propriety of usage, using utility vehicles within the farm increases liability even as it increases productivity. Overloading vehicles, improper usage such as the neglect of wearing proper protective equipment during use of the utility vehicle in your farm, may all lead to injuries that are more than a mere scrape and would require additional compensation, either for visitors or to your hired hands.

Adding coverage for vehicle-related injuries that might require additional compensation is a must, especially if your farm regularly has visitors or more than a handful of employees.

This would ensure that when the time comes wherein anyone in your farm business is injured, and you are legally liable for the injury or damage, expenses for the compensation are covered by your acquired policy.


If you use large quantities of chemicals on your farm, such as pesticides, fertilizers, or if you utilize runoffs as well as above-round or underground storage tanks, then this is essential for your farming business.

There are many ways that your farming operations may be held liable for polluting; such as the possibility of chemicals getting carried away by the runoffs onto a neighboring farm, storage tanks leaking, potentially contaminating the surrounding areas of your farm, and many more.

Securing your business with environmental insurance is a must if you want to prepare for those potential mishaps or perils in your farm, such as injuries or property damages caused by pollution incidents.

Custom Farming/ Business Activities

Naturally, the liabilities of the farms offering the latter increase, the more people are present and susceptible to injuries related and happening within the areas of your farm.

Farms nowadays offer more services: hayrides, corn mazes, even serving as venues for events or weddings.

If your farm provides additional services for clients, then this one is for you.

Additional services, such as farm tours, increase liability as your visitors, who can potentially be injured within your farm’s premises, increase as well. This is but one of the many things that you should remember and watch out for.

For example, unsupervised students and children on school trips to your farm, sometimes even adults, might wander off into areas without sufficient security from potentially injuring farm animals or equipment. Once they are injured, it is indisputable whether you may or may not be held accountable for the sustained injuries. Nevertheless, preparing is a priceless strategy that may one day save your farming business from getting sued.

As simply adding warning signs and precautionary measures aren’t always enough, it is suggested that you, as a liable farm owner, should take the extra mile and prepare coverage before the instance that injuries and damages do happen.

Farmers Personal Liability

There are some situations, however, when farming is not the insured’s primary occupation, or when their residence is separated from the farming premises. The Farmers Personal Liability Insurance covers for these commonly excluded instances and can be an additional endorsement. This can also be extended so as to cover employers’ liability and even the medical payments for the farm employees of the insured. 

Umbrella Insurance Policy

An umbrella insurance policy acts as a safety blanket for those insured with it, for when one’s farm business’s liability loss exceeds the limit of their standard insurance policy.

True to its name, as well, the umbrella insurance policy acts as an umbrella over all your current farm policies.

This means that should the need arise, if you have acquired a commercial umbrella insurance policy, it might just act as your safety net when all else fails. When getting a commercial umbrella insurance policy, it can either be an additional endorsement in your insurance policy or be a separate coverage. 

 These are only some of the many liabilities that your farm may have. Liabilities, in general, are subjective to what the farms in question are offering, be they services or products.

Adding endorsements or including possible perils in your farm’s insurance policy is highly customizable and can always be adjusted according to your enterprise’s needs.

Liabilities, so to speak, are what one should prepare and invest in by covering for them appropriately.  

For any questions or suggestions, don’t hesitate to contact us. We’d love to hear from you.

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