Liability Insurance for Small Farms

Pat Sering, AINS, AISFarm / Crop Specialist

A bit about me…and my family

A bit about me…

Discussion Topics“Make sure your assets are protected” Discuss types of activities and injury incidents

Discuss safety and health issues for farm operations and potential hazards

Discuss strategies to manage your risks Discuss your legal responsibility and your liability insurance needs

Discuss Liability Waivers Discuss Employee concerns

Farm Activities Farmers Markets Corn Mazes Pumpkin Patches Hayrides Pick your own (U-pick) Petting Zoo Christmas Tree Sales Equine Activities Fishing/Hunting Wineries Bed & Breakfast Etc.

Headline News…

Toddler Dies from Playground Incident

12 Hurt in Miniature Train Incident

Pumpkin Patch Petting Zoo Infects 3 Kids

Student Falls in Bonfire at Barn Dance

9-year-old Boy Injured at Pumpkin Patch

Swimming Hole is Deadly Trap

Visitor Injured in Zip Line Incident at Farm

Just Imagine…If one of these incidents happened at your farm…What would be the consequences?

Bad Publicity Reduced Attendance Increased Insurance Premiums Lawsuits Operation Closes Bankruptcy?

Why is safety important?Unfortunately, these examples provided are not rare events…

Approximately, 14,000 children are injured each year on farms/ranches

40% of injured children are visiting

It is the responsibility of the owners/operators to ensure the safety & health of all guests

Your potential guest…Unfamiliar with agriculture

Parents looking for a free babysitter

Easily distracted (cell phones)

Rules “don’t apply to me”

Common sense doesn’t exist

Americans are litigation happy!

Liability = Legal Responsibility ◦ The person or entity who owns or leases property is

legally responsible for the well-being of visitors

There are inherent hazards in agriculture, but risk can be managed

You can take every precaution and still get sued

“Make sure your assets are protected!”

How can insurance can help manage your Agriculture Risk?

RISKAvoid

Reduce

Accept

Transfer (Insurance)

Most farm/ranch insurance policies are written to cover what an insurance carrier considers a “traditional” farm or ranch.

The insurance carrier may consider your agritourism activities as “business” – not farming and your policy may have exclusions or limitations.

Do not assume information you received from one company is applicable to all companies (Almost every insurance company has different policy language.)

Some companies used standardized forms and some do not. And companies with standardized forms may deviate from them for unique risks like agritourism.

Your insurance company may require a commercial insurance policy, rather than a traditional farm or ranch policy.

Every insurance company has a different “risk tolerance”. One company may express more concern over an activity than another company. For example, one company may be comfortable insuring a pumpkin launcher, while another may not.

Issue Liability Waivers

A liability waiver asserts that your guests assume responsibility for certain risks

Does not absolve you of your responsibility for your guests’ health and safety

Is a legal document, valid in court, and highlights risk for your visitors

Check with your lawyer or insurance agent

Have the Appropriate Legal Structure

Your choice will influence many components of your enterprise including management, taxation, and succession planning

Sole proprietorship Limited proprietorship General partnership Limited partnership Limited liability partnership Corporation

Meet with your insurance agent regularly to discuss: ◦ The activities you are providing.◦ The property you are using for agritourismactivities.◦ The amount and type of coverage you need.◦ Don’t be afraid to ask questions!

Be completely open and honest to avoid any surprises at claim time!

Employee considerations

Background checks on any potential employees who would come into contact with children

Follow good hiring practices Orient and train your employees Encourage, empower, reward Documentation is very important Provide safe and health conditions

“Make sure your assets are protected!”

Other Concerns…

Alcoholic beverages Products Liability Vicarious liability Off farm liability Medical Payments vs. Liability Employers Liability vs. Workman’s Comp. Business property coverage Individuals requiring special needs

Americans with Disabilities Act (ADA) mandates any business serving the public meet specified accessibility standards including access to:

◦ Parking ◦ Restrooms ◦ Eating facilities ◦ Transportation ◦ Lodging

Think Ahead…

Information that needs to be communicated

with Guests

Provide emergency manuals and checklists for

employees

Role-play situations

Conduct Walkthroughs (using checklists)

There are many safety and health concerns for all agritourism operations; making sure proper risk management has been addressed and being prepared for the unexpected is key!

Additional Resources and materials are available:

www.marshfieldclinic.org/nccrahs

www.safeagritourism.com/Resources

Checklists

National Children's Center for Rural Agricultural Health Safety Checklists Corn maze checklist Farm Market checklist Barriers and Fencing checklist Food Safety checklist Communicating with Guests checklist Machine Safety checklist Hayride Safety checklist Large Animal Safety checklist Play Area checklist Petting Zoo checklist Traffic and Parking checklist Walkways and Structures checklist Water and Attractive Nuisances Checklist

In Conclusion…Agriculture is risky business

Bringing members of the public onto the property increases the risk

Farms and agribusinesses best protect themselves from liability by engaging in a proactive safety program

To be successful, safety must form an important part of the day-to-day business!

Indiana Farm Bureau is the Number 1 farm insurer in the state!

Farm Crop/Specialist throughout the state Over 400 agents with at least 1 office in

each of the 92 counties. Superior claims service with a claims

representative in every county. Innovation; the first insurer in Indiana to

provide coverage for drones.

Discussion

Questions?

Comments?

Thank You!

Pat.sering@infarmbureau.com

(765) 362-3624 ext. 2498

It’s up to you...

“Make sure your assets are protected!”