Farmers manage numerous risks in their daily operations, from employees being harmed by cattle and equipment to the products they produce causing injury or illness in consumers. A farm must always be cognizant of the many things that can—and do—go wrong in this industry.
Farm and ranch insurance is the best way to ensure financial repercussions do not threaten your operation should something go wrong, but within a farm insurance policy are multiple decisions about which types of coverage suit your farm best.
All farms should utilize basic liability insurance protection as the foundation for their insurance coverage. Let’s explore liability insurance, types of coverage, and how they can help you safeguard your farm investment against legal fees, medical bills, and more.
What Is Liability Insurance?
Basic liability insurance protects the holder against the financial consequences of hurting someone else because of the farm’s operations. This protection also extends to other people’s property.
If a third party’s property is damaged due to farm operations, replacement or repair can also be covered under liability insurance. Thus, if a farm is responsible for injury to someone else or damage to their things, this type of insurance can pay to fix the problem.
Liability insurance comes in multiple forms, and most farmers benefit from carrying more than one type. General liability is always wise, but consider professional and product liability depending on the operation you run.
Risks Farmers Face Every Day
The three most salient risks farmers face daily are property damage, visitor and consumer safety, and environmental or pollution issues. As mentioned, general liability insurance covers property damage and ensures the safety of people visiting the farm premises.
However, when a farm produces items sold off-premises, it is wise to expand coverage to include product liability insurance. This type of coverage assists if a farm should produce something that causes harm to someone else.
For instance, suppose a vegetable farm grows lettuce contaminated with salmonella. However, contamination was discovered after the lettuce was sold in stores. Product liability insurance can cover their reported medical expenses if people get sick.
Furthermore, many farms rely on heavy equipment such as tractors, irrigators, and harvesters to get the job done. If one of these large machines leaks oil or catches on fire, it can leach hazardous materials into the environment. Farms at risk of polluting their local land can benefit from environmental protection or pollution insurance, which can cover the cost of remediating the space.
In addition, local bodies may levy fines against the farm for the environmental damage they have caused, regardless of whether the farm remediates the area. These fines can be included in the coverage offered by farm pollution insurance.
Keeping Your Policy Up to Date
Regular reviews of farm insurance policies are just as essential as the coverage itself. It is wise to review insurance coverage at least once per year and after every reported incident. This can reveal whether coverage amounts are sufficient and whether additional coverage needs to be purchased to adjust to a growing farm or one that has branched into different practices.
Most farms operate with at least one million in general liability insurance coverage with an aggregate limit of two million. However, the size of the farm and the specific type of farming they do will impact the strategy behind this number.
Another reason to regularly review insurance policies for your farm is to verify which events and perils are covered and which are not. For instance, some general liability insurance policies will cover any injury to a visitor during their stay on your farm. Still, others may exclude injuries from a farm worker incorrectly operating equipment.
Protect Your Farm with Liability Insurance for Farmers by Burton & Company
Protecting your farm is a significant venture, but it is worth your time to comprehensively review your options so that your investment into your ranch does not go to waste. The experts at Burton & Company help farmers identify the most salient risks for their operations and create customized insurance protection that addresses their needs without straining their budget.
Burton & Company has years of experience in farm and ranch insurance, so we understand the common risks and how to protect you against them. Contact Burton & Company to schedule an appointment to share your farm operations and discover the broad range of liability insurance coverages that can keep you secure, whether you sell products across the country or stock your local market.
