As your farm grows, so do your liabilities. Proper farm insurance, which can include property insurance, general liability insurance and workers compensation, provide large operations with protection and peace of mind.
“Large farmers tend to neglect the need for proper umbrella coverage limits, especially when it comes to the increasing net worth of the farm,” says Jay LeFevre, agent, First Gabrielson Insurance Agency.
Failure to purchase sufficient coverage for business size and activities can have severe consequences for the financial health of the farm, explains Ray Massey, University of Missouri Extension economist. As such, it is important to know what your policy covers, but it’s just as important to know what it does not cover.
“It is critically important to review coverage at least on an annual basis,” adds Amy Fairchild, commercial account manager, ProValue Insurance.
As you review your policies, make a point to add recording keeping to your process. “Anything they can do to provide records, from written safety protocols to detailed spraying records to employee meeting notes to employee training reports will be a big help, says Stacy Walton, director of farm casualty for Grinnell Mutual.
LeFevre, Massey, Fairchild and Walton suggest farmers sit down with their insurance providers and ask the following questions.
Assets
- With higher construction costs, are my property and assets undervalued?
- If I need to totally rebuild a grain bin system or finishing barn, will my policy cover it?
- Do I need additional coverage for tools and technologies such as drones?
Diversified Operations
- My operation includes many entities (crop production, trucking, etc.), does my umbrella policy cover all of those at a high enough level?
- Do I need any endorsements, additions or riders to policies to cover my operation? (These are common for activities such as custom farm work, spraying chemicals, snow removal, agritourism or food sales.)
- I have a livestock production contract. Does my farm liability policy offer enough coverage?
Employees
- I have a large team of employees. Do I need a crime policy or an employment practices liability policy in case of wrongful termination?
- To what extent will my policy protect me from a large liability exposure, such as an employee injury?
- Who exactly does my policy cover? Besides me (the policyholder), does it include relatives, all employees (full-time, short-term, seasonal) and independent contractors?
Access a guide from the University of Missouri to help you further review your farm liability insurance policy.
