Evaluate Your Liability Coverage

02:21PM Dec 12, 2018
Crop insurance might not be sufficient
( Darrell Smith )

With 2019 waiting in the wings, this is a prime time to think about business matters such as your liability insurance coverage.

“Limits should cover the exposures that exist on your farm,” says Jason Berkland, Nationwide Insurance director, commercial lines underwriting.

For example, do you spray your own crops or hire a custom applicator? It also might be worth asking your agent about specific coverage for certain pesticides.

“Recent issues with dicamba spray drift highlight the need for farmers to understand their third-party liability due to herbicide applications,” says Ray Massey, economist at the University of Missouri. “General liability may or may not help with third-party herbicide injury.”

USDA allows farmers to exclude acres damaged by pesticide drift in their actual production history if damage is reported to their insurer within 72 hours. However, crop insurance doesn’t cover pesticide drift damage, according to USDA Agriculture Risk Management Agency.

Liability insurance companies often wait until after harvest to settle claims so they can better estimate yield loss based on the conditions of the season. Massey offers the following tips for selecting your liability coverage:

  • Verify any applicator you hire is certified to apply the pesticide you’re using. If you spray your own crops, go through the training required for the products you use.
  • Review your general liability insurance coverage and update if there have been changes in your operation, such as hiring an employee.