Every farm insurance policy will include coverage for basic farm liability. Sometimes, understanding liability insurance can be murky. A good, general definition of liability insurance is:

“An Insurance product that provides protection against claims resulting from injuries and damage to other people or property.” – Investopedia

When you add liability to a commercial farm, the definition grows to add coverage for claims resulting from animal husbandry, farm machinery, farm vehicles, and regular farming operations.

Farms are often large businesses, with many different risks that can impact day-to-day operations and financial success. Farm liability insurance is one tool to help producers manage their risk. Some of the costs associated with farm liability insurance include:

• Legal fees to defend you
• Fees for appraisal, mediation, and arbitration
• Medical fees and settlements for bodily injury claims
• Settlements for property damage liability claims

Coverage for any claim is always determined based on the unique terms of your insurance policy and the wordings that are attached.

Additional Insureds on a Farm Liability Insurance Policy

Did you know you might need an additional insured listed on your commercial farm insurance policy? An additional insured is a person or company who has an interest or a risk in your property. They are included on the policy to provide full protection for all. Some examples of additional insureds are:

Landlord: this person or company owns the land or building you are leasing. You share liability in the event of a claim on that land or building.

His Majesty the King: this insured is added to any government land or waterways where a commercial farm may be doing business.

Farmers market: if you operate a stand at a farmers market, you are sharing some of the risks. You occupy a stall to sell product, and they give infrastructure and advertising to draw people to the market. Adding the market as an additional insured helps cover any grey areas in the event of a claim.

Leased or loaned farm machinery: in most cases you will need to add the financial institution or company who owns the equipment as an additional insured. They share a vested interested since they are legally the owner of the machine, this avoids any gaps in coverage.

Your Farm Liability Insurance Policy

Working together with your insurance broker, you can build a policy to suit your unique farm! A broker will ask you to detail all of your operations to get a quote, generally the following details will help you:

• Size of your farm, any leased land, and location
• Type of mobile farm machinery
• Farm operations
• Third-party or commercial operations
• Number of employees
• Number of homes on the property and occupants
• Gross annual receipts

When you choose your limit of insurance for farm liability, it should consider all of the above scenarios and the amount of coverage you might need for an insurable claim. Limits vary based on the insurance company but generally you can choose a limit as low as $1 million and up to $10 million or more.

Connect with a Mutual Fire Insurance broker to learn more and get a quote for your operation!