What Does A Farm Liability Policy Cover?

Aug 11, 2020 | Business Insurance

As a farmer or a business owner in the field of agriculture, many people rely on you for their basic needs. The nature of your occupation, however, puts you and your business at risk of unexpected expenses arising from accidents and unforeseen events.

With that being said, one of the important things you need to consider getting is farm liability insurance. Liability Insurance protects you and your assets against claims caused by bodily injuries and property damages.

One of the purposes of farm liability insurance is to have protection for people who are visiting your farm.  Should there be any accident, your insurance will cover medical costs–regardless of who is at fault.  In the same manner, farm liability insurance also offers financial protection in the event your farm’s operations cause damage to the property of others.  As a result, you can rest assured that your business, investments, and property are secured from unexpected financial blows that may arise from a variety of situations that may occur.

Farm liability policies cover a variety of areas that cater to the specific needs of business owners.  In addition to providing personal liability coverage for those who set foot on the farm, different agricultural businesses have different operations and natures wherein their assets are also put at risk. Here are the common types of liability coverages: 

Premises Liability

The liability coverage that caters to certain situations involving the physical condition of your place of business is called a Premises liability. A very good example is when a guest accidentally slips while walking around the farm.

Farm owners are generally held liable for medical expenses and any other expense that might arise from accidents such as slipping or falling debris.

Operations Liability

Accidents that happen due to farm machinery or ranch operations fall under the Operations liability.

This liability coverage is very useful for farmers and ranchers who have multiple fields that have public roadways that run through them. These situations would require the transfer of materials or farm products from one field to another. Also, it would require them to cross or traverse the roadways.

Another situation wherein this liability coverage proves to be useful is during the harvesting season. During this time, farmers would have to transfer the harvested farm products from the field to the barn or the silos.

Farm Product liability

This covers instances wherein your sold unprocessed produce causes an injury or illness to the public. An example is when grapes from your vineyard are sold and one of the buyers claims to have acquired food poisoning from your product.

Someone claiming that they were poisoned by consuming a product from your farm is no small matter and it has to be dealt with as soon as possible.  Having farm product liability coverage provides you and your business a financial safety net.

Note that commercial liability coverage will be needed where processed products such as wine, fruit juices, and other processed farm products are concerned.

It would also be best to consult your insurance agent about the details of your coverage and how it applies to your business because the policies may differ from one insurer to another.

Pollution Liability

Pollution liability covers pollution, property damage, and injuries that result from the emission of unwanted byproducts from your farm.

Certain farm businesses like Livestock farming or Concentrated Animal Feeding Operations (CAFO) have unwanted byproducts or pollutants from their operations. Manure is the most common and abundant unwanted byproducts from these farms. It is known to emit pollutants and organic compounds into both air and water. These include methane, hydrogen sulfide, nitrous oxide, and ammonia, which are all harmful to the environment in their own ways.

Greenhouse gases such as Nitrous oxide and Methane are known to contribute to climate change; ammonia contributes highly to increasing soil and water acidity.

There is always the risk of claims due to injuries or health issues when you run a CAFO or farming business that emits pollutants.

Having pollution liability coverage in your policy could prove to be beneficial in protecting your assets and investments from potentially huge expenses.

Umbrella Liability

Accidents are oftentimes inevitable. An umbrella liability insurance can help protect your farm and personal assets in the event you are held responsible for bodily injuries and property damages caused by an accident.

If a visitor in the farm gets hit by an animal, this coverage can protect you from unexpected expenses. Your umbrella liability coverage will pay for the medical bills that arise from injuries caused by the accident. If the other party decides to press charges against you, this coverage will also help you pay for the damages.

Other Liability Coverages

In addition to the most common liabilities mentioned above, there are still other liabilities and situations that your policy can help you with.

Acts of your Pets or Livestock

In most agricultural businesses, pets are acquired to aid the farmers in doing their jobs. An example of this is shepherd dogs that help farmers herd their sheep back into the housing areas.

While these pets help a lot in the daily operations of the farm, there are times where they can inflict unwanted harm on others. Examples are biting a visitor due to agitation, injuring another person, or causing damage to property.

The same applies to your livestock which may also harm other people that come to visit your farm or ranch. Your policy coverage will help cover medical expenses and property damages that were caused by your pets or livestock.

Fire Legal Liability

Some farms operate beside or near the vicinity of other farms and properties. The Fire Legal Liability coverage focuses on helping with situations wherein your farm machinery or vehicles catch fire.  The same goes when your farm equipment causes fire and eventually damages other properties around your farm.

Farm Chemicals Limited Liability

In relation to the pollution liability coverage, the farm chemicals limited liability covers damages that are caused by farm chemicals and pesticides.

Some agricultural farms make use of pesticides, or other farm chemicals in order to help them with their farm operations. Unwanted instances wherein these chemicals or pesticides move through the air, land, or water, can cause damage to other properties.

Being in the farming and agriculture industry is a tough task for any business owner. It is a delicate industry that requires consistent hard work and monitoring from the business owner and ensuring that all aspects flow smoothly. Just like in other businesses, investments and assets are on the line when accidents cause injury. The same goes when certain aspects of daily operations cause damage to property.

Getting a Farm Liability Policy helps you cover for lawsuits due to accidents that happen during operations or due to your livestock. It can cover the medical expenses for which you are held liable. The policy also helps cover losses from calamities such as wildfires, earthquakes, and other disastrous events. The insurance helps protect you and your business, as well as ensure the safety of your assets.