Farm And Ranch Insurance FAQ

• At the minimum, farms and ranches need farm liability insurance.
• Farms and ranches might also need crop and livestock insurance.
• If they have employees they will need workers compensation in most states.
• If they have vehicles registered to the business, or use vehicles for the business purposes, they will also need commercial auto. With farms certain vehicles can sometimes be listed on a personal policy.
• There are also other specialty coverages and endorsements that might be needed based on their operations.

When it comes to farming, one size definitely does not fit all! Because of this, there are many coverage options to consider and a great deal of form flexibility available. Both the insured and the insurer benefit when many coverages are combined into one policy but doing so is not always possible.

Each policy option listed and described below must take into account the eligibility requirements of the program, as well as the actual activities taking place at the farm or ranch. For example, a farming operation operating several businesses in the names of a number of different entities may require more than one package policy.

On the other hand, another operation may be able to combine all its activities and entities under a single policy.

Types Of Farm And Ranch Package Policies:

• Businessowners Policy (BOP)
• Commercial Package Policy (CPP)
• Farmowners Policies
• Farm Combination Coverage
• Homeowners Coverage

Asset protection is the major concern of most farm operations. These assets include all buildings and structures on the farm property in addition to owned household and business personal property located on and away from the premises.

Some farm buildings are occupied and used for farming operations. Others are used by the family for personal activities. Some operations also have tenant-occupied properties.

In a growing number of cases, some family members who retain ownership in the farming operations may be in retirement homes or semi-retired and spending part of the year out of state but continue to need coverage.

Types Of Property Coverages:

• Building and Personal Property Coverage Forms
• Builders Risk Coverage
• Equipment Breakdown Protection Coverage
• Farm Property Coverage

Loss of crops or livestock can financially ruin a farming operation. Therefore, special coverages are available to specifically cover these unusual loss exposures. The market is limited because of the unique nature of the exposures and the specialized knowledge necessary to price the risk and adjust claims.

Types Of Crop And Livestock Coverages:

• Bloodstock Insurance
• Crop Hail Coverage
• Livestock Coverage Form
• Livestock Mortality Coverage
• Multiple Peril Crop Insurance
• Revenue Insurance

The different types of property commonly found on farms and ranches can be insured under inland marine coverage forms. There are many forms but the common denominator is that they cover the hazards of transportation in addition to other perils or causes of loss. Some of these forms cover the household personal property while others cover the farm operations property.

Types Of Inland Marine Coverages:

• Accounts Receivable Coverage
• Electronic Data Processing Equipment Coverage
• Mobile Agricultural Machinery and Equipment Coverage Form
• Personal Articles Floater
• Transportation Coverage
• Valuable Papers and Records Coverage

While some farms may be served reasonably well by the crime insurance found in personal insurance forms, larger farms or commercial operations may need the commercial crime forms. The insured should consider a complete analysis of actual crime exposures to which the risk is exposed, such as employee dishonesty, fraud, theft of money and securities.

Types Of Crime Coverages:

• Computer and Funds Transfer Fraud Coverage
• Employee Theft Coverage

The type of form used to insure the liability exposures of a farm or ranch depends on the nature of the risk and the underwriting practices of the insurer. A farm liability, commercial general liability or personal liability coverage form may be used. Brief descriptions of the forms, pertinent endorsements and supplemental insurance that expand coverage follow:

Types Of Farm Liability Coverages:

• Christmas Tree Lots
• Commercial General Liability (CGL) Coverage
• Custom Farming Liability Coverage
• Employment-Related Practices Coverage
• Farm Liability Coverage Form
• Farmers Personal Liability Coverage
• Personal Injury Endorsement
• Railroad Protective Liability Coverage
• Underground Storage Tank (UST) Liability Coverage

The automobile exposure must be carefully considered because farmers often drive on public roads with heavy loads when going from one field to another. The driving age in some farming communities may be lower from time to time to recognize the active role of children in bringing in the harvest on a family farm.

Young drivers comfortable in driving the farm wagons may be in danger of being overly confident driving back roads in the family car or pickup. The distances driven are not usually excessive but cases may arise that involve travel to distant locations to obtain higher crop prices.

It is not unusual for a farm/ranch auto exposure to be a combination of some very difficult personal and commercial exposures.

Types Of Personal And Business Auto Coverages:

• Auto Medical Payments
• Business Auto Coverage
• Collision Coverage
• Comprehensive Coverage
• Hired & Non-owned Auto Coverage (HNOA)
• Uninsured/Underinsured Motorists Coverage

The laws and statutes of a given state must be reviewed carefully to determine if its workers compensation laws pertain to farm employees. The coverage provided applies to losses due to the statutory liability of an employer as a result of personal injury or death to an employee in the course of employment.

Monetary compensation is provided in amounts prescribed by law. However, some agricultural workers are exempt from coverage. It is important to add voluntary compensation coverage endorsement to cover those workers in order to avoid a coverage gap.

Farm workers have some of the highest rates of work-related injury, so coverage should be as broad as possible. Endorsements are available to add employers liability coverage to the farm policy.

Types Of Workers Comp Coverages:

• Stop-Gap or Employers Liability Coverage
• Voluntary Compensation Coverage
• Workers Compensation and Employers Liability Coverage

These forms can provide excess liability limits for general, personal, auto, employers liability and even aircraft and watercraft exposures, if needed. They also provide protection to the insured with respect to certain exclusions in the underlying policies and coverage gaps that can occur.

An umbrella liability policy is triggered when the primary policy insurance limits are exhausted or, in cases of claims not covered by underlying or primary liability policies, when the self-insured retained is satisfied.

Types Of Excess Liability Coverages:

• Commercial Umbrella Coverage
• Excess Liability Coverage
• Farm Umbrella Liability Coverage
• Personal Umbrella Liability Coverage

The farm business changes constantly and only those operations that modify, adapt and change to reduce costs and overhead while increasing revenues have any chance to survive. Thorough exposure analyses are needed to uncover any potential coverage gaps that may exist. One or more of the following coverages may fill a coverage gap or respond to an identified coverage need:

Types Of Specialty Coverages:

• Aircraft Liability Coverage
• Aircraft Passenger Liability Coverage
• Aircraft Physical Damage (Hull) Coverage
• All-Terrain Vehicles Coverage
• Business Legal Expense Coverage
• Cyber Liability Coverage
• Foreign Insurance Requirements
• International Insurance Coverage
• Kidnap/Ransom Extortion Coverage
• Mountain Bikes/Dirt Bikes Coverage
• Snowmobile Coverage
• Unmanned Aerial Vehicles (UAV) (Drones)
• Watercraft and Yacht Coverage