Farm Labor Contractors Insurance Policy Information
Farm Labor Contractors Insurance. Owning and operating a farm, large or small, can be an overwhelming amount of effort. Not only do you have to count on good weather to produce a bountiful yield, but the amount of work is also typically enough; you will have to hire employees to ensure everything gets done throughout your season.
Farm labor contractors recruit and employ farm workers who harvest crops for others. They may be compensated for their services by the farm with the job opening or by the person seeking employment, on either a commission or flat fee basis.
The contractor is responsible for all labor-related issues, including payroll accounting, withholding for all applicable state and federal taxes, workers compensation, and compliance with the Migrant and Seasonal Agricultural Worker Protection Act (MSAWP).
The contractor normally provides transportation for workers to and from the fields. The contractor may also provide housing, clothing, protective gear, food, and other services to the workers.
Whenever you hire employees, it is crucial to think about the legal liabilities that come with hiring that help and the farm labor contractors insurance you will need to protect your workers and operations. You can incur liabilities for any damage to third parties brought about by your employees' neglectful actions, of if your workers get injured.
Farm labor contractors insurance protects your farm workers business from lawsuits with rates as low as $77/mo. Get a fast quote and your certificate of insurance now.
Below are some answers to commonly asked contracted farm workers insurance questions:
- What Is Farm Labor Contractors Insurance?
- How Much Does Farm Labor Contractors Insurance Insurance Cost?
- Why Do Farmers Use Farm Labor Contractors?
- What's The Farmer's Liability For Using Farm Labor Contractors?
- How Does Workers Compensation Work For Farm Labor Contractors?
- What Does Farm Labor Contractors Insurance Cover & Pay For?
What Is Farm Labor Contractors Insurance?
Farm labor contractors insurance is a type of insurance coverage designed to protect farm owners and farm labor contractors from financial losses due to incidents that occur while workers are on the farm.
This type of insurance covers a range of potential incidents, including accidents, property damage, and liability claims. It is designed to provide coverage for a wide range of farm-related activities, such as harvesting crops, operating farm machinery, and working with livestock.
This type of insurance is essential for farm owners and farm labor contractors to protect their business and assets from financial loss due to incidents that occur while workers are on the farm.
How Much Does Farm Labor Contractors Insurance Cost?
The average price of a standard Farm Labor Contractors Insurance policy for small farms and agribusinesses ranges from $67 to $99 per month based on number of workers, type of farming, location, payroll and more.
Why Do Farmers Use Farm Labor Contractors?
There are three types of workers that farmers can employ in order to run a successful farm:
- Servant: This could be someone you hire, is a part of your crew, and you have authority over the way this employee conducts themselves on the job.
- Agent: Someone who is hired to conduct pointed business on your behalf. They may also manage affairs such as finances or lead a crew of servants.
- Independent Contractor: Someone you contract in order to accomplish certain tasks on the farm. This contractor will perform the job you need but will follow their own system and methods to get the job done.
What's The Farmer's Liability For Using Farm Labor Contractors?
How do the three types of workers affect your liability concerns in the framework of working on your farm?
If you manage the actions of servants you hire, this is known in legalese as a master-servant relationship. You may be liable for the actions of your employee if that employee causes personal injury or any type of damage to the property of any 3rd party. As such, legal liability is not always cut and dry in every case, and judgment is often decided with a judge or jury.
The agent may have duties that are pointed and clear, but their actions or negligence may result in your liability for injury or damage occurring during the course of their task. Depending on the agent's duty, seeking legal advice beforehand can help to mitigate some of these issues.
Independent farm labor contractors typically carry less of a liability risk when hired. Because they are brought in to accomplish specific tasks, they are going to utilize their own system and way of doing things. As a farm employer, you would typically not be responsible for the actions or the result of those actions, that occur due to them.
There are unique situations where you could be legally liable in the event injury or damage occurs:
- High-risk job duty
- Plans for the job that are flawed and can prove to cause injury or damage
All farming work has its risks, and the best course of action to mitigate that risk is to work with your agent to secure a comprehensive farm labor contractors insurance policy that is tailored to your specific operation.
You have options to protect your workers and operations, in the form of worker's compensation insurance and employer liability insurance.
How Does Workers Compensation Work For Farm Labor Contractors?
Workers Compensation Insurance
Virtually every state requires worker's compensation, which has been designed to cover costs associated with an employee's injury on the job. Each state's body of laws and benefits vary. Your broker should know the minimum requirements for your area.
Employer's Liability Insurance
This type of liability insurance will protect you from legal liability of an injury to an employee if Worker's compensation does not cover the incident. There also may be a gap in the coverage for the employee from worker's compensation, and that employee may decide to sue you, the employer, for the difference of the gap in coverage.
Employer's Liability insurance will cover the gaps if you hire farm labor contractors for your operation. Taking into account all types of risks associated with managing and operating your farm, you want the peace of mind that comes in the form of uninterrupted coverage.
What Other Insurance Types Do Farm Labor Contractors Need?
Minimum recommended coverages: Business Personal Property, Employee Dishonesty, Money and Securities, Accounts Receivable, Computers, Valuable Papers and Records, General Liability, Employee Benefits, Umbrella, Commercial Auto Liability and Physical Damage & Hired and Non-owned Auto.
These are just some of the farm labor contractors insurance insurance coverage you might need. Your best course of action is to work with a trusted agent to identify and secure your farm labor contractor's insurance needs.
Your agent will know what your state's requirements are and can outline any gap insurance needs you may have based on the way you manage your farm operation.
Yes, people steal chickens! Your policy should take into account what would happen in the theft of any of your property, including your animals.
Farm Labor Contractor's Risks & Exposures
Premises liability exposures at the contractor's office are limited. Off premises, workers may damage the farmer's property where they work. Because the contract between the farm labor contractor and farmer may include insurance-related contractual obligations, it should be reviewed carefully.
Personal injury liability exposures are moderate due to the amount of confidential information obtained from job seekers. The labor contractor must take great care to maintain confidentiality when obtaining and releasing information regarding workers and employers.
Workers compensation exposures are very high as farming is labor-intensive. Training, supervision, and communication is important in maintaining a safe work environment. Working around farm machinery, tools and equipment can result in a variety of injuries ranging from minor to severe.
Slips, trips, falls, back injuries, broken bones, foreign objects in the eye, hearing impairment from noise, and muscle strains are common. Exposure to farm chemicals, noxious odors from livestock, and organic dust can lead to respiratory issues. Workers can suffocate in confined spaces such as grain bins, tanks, silos, and pits. Safety harnesses and respiratory protection are required.
Injuries can result from falls from heights and loading and unloading vehicles. Auto-related injuries may occur, especially when workers are transported for long distances. Workers being housed at camps may present a 24-hour exposure.
Property exposures are generally limited to those of an office. Ignition sources include electrical wiring, heating, and air conditioning systems. If the contractor provides housing to the workers, the electrical and plumbing systems should be well maintained and meet current codes.
This housing is usually in isolated areas with little public fire protection and is vacant during the off-season. When housing is provided, common meals are served in a central kitchen area with equipment limited to domestic ranges. Fire extinguishers should be up to date and residents taught to use them effectively.
Crime exposures include employee dishonesty and theft of money and securities. Pre-employment checks should be conducted for any employee handling money. There should be a division of responsibilities, so the same worker is not responsible for receiving money from farmers, paying workers, and reconciling bank statements.
Workers are often paid in cash, requiring a substantial amount of money on payday that may be tempting to both employees and thieves.
Inland marine exposures include accounts receivable if the contractor offers credit to farmers, computers, and valuable papers and records, including employment contracts and all documentation required for MSAWP compliance. Duplicates should be made and kept in an off-site backup facility for easy reproduction following a loss.
Because most farm labor contractors are constantly moving, mobile equipment and transit coverages may be needed for items that accompany the workers.
Business auto exposures are moderate because vehicles are used to transport workers to and from the farms and from one field to another. These trucks, vans and buses may be driven on major interstates as well as on small winding rural roads.
Drivers should have appropriate licenses and acceptable MVRs. Vehicles must be maintained, and records kept in a central location.
What Does Farm Labor Contractors Insurance Cover & Pay For?
Farm Labor Contractors (FLCs) can face legal action for a variety of reasons. These typically revolve around issues related to employment law, such as wage disputes, unsafe working conditions, and discrimination. Insurance policies can help protect FLCs by covering the costs associated with legal defense, settlements, and court-ordered payouts. Below are some examples:
1. Wage and Hour Disputes: An FLC may be sued if they are accused of not paying their workers appropriately, either by failing to meet minimum wage requirements, not paying for overtime, or misclassifying workers. If the FLC holds Employment Practices Liability Insurance (EPLI), it can cover the defense costs, settlements, or judgments associated with these types of claims. This coverage is particularly important because wage and hour disputes can result in substantial financial loss.
2. Unsafe Working Conditions: If an FLC is accused of maintaining unsafe working conditions, leading to injuries or illnesses, they may face a lawsuit. Workers' Compensation Insurance is essential in these cases. It covers medical costs and lost wages for employees who become injured or ill due to their work. Furthermore, Employers Liability Insurance, which is typically included in a Workers' Compensation policy, can help cover the costs of legal defense if the FLC is sued over the injury or illness.
3. Discrimination Claims: An FLC might be sued for alleged discriminatory practices, such as unfair hiring, firing, or promotion based on race, gender, age, etc. EPLI can help in these scenarios by covering legal defense costs, settlements, or court-ordered payouts.
4. Breach of Contract: If an FLC fails to fulfill the terms of a contract with a farm owner or another contractor, they could be sued for breach of contract. Commercial General Liability Insurance (CGL) often includes coverage for personal and advertising injury, which can sometimes include allegations of contractual violations. However, for more comprehensive protection, FLCs might consider Professional Liability Insurance (or Errors and Omissions Insurance), which can cover claims related to services provided and contractual performance.
5. Damage to Property: An FLC could be held liable if their operations cause damage to the farm owner's property. CGL Insurance provides coverage for third-party property damage claims, which can help pay for repairs or replacement and associated legal costs.
Each of these insurance types offers a layer of financial protection for FLCs, but it's important to note that exact coverages can vary based on the specific policy and insurer. Therefore, FLCs should work closely with their insurance agent or broker to ensure they have the appropriate coverage for their unique risks.
Commercial Insurance And Business Industry Classification
- SIC CODE: 0761 Farm Labor Contractors and Crew Leaders
- NAICS CODE: 115115 Farm Labor Contractors and Crew Leaders
- Suggested ISO Farm and Commercial General Liability Code(s): 43840
- Suggested Workers Compensation Code(s): 0016 Farm - Orchard or Grove & Drivers
0761: Farm Labor Contractors and Crew Leaders
Division A: Agriculture, Forestry, And Fishing | Major Group 07: Agricultural Services | Industry Group 076: Farm Labor And Management Services
0761 Farm Labor Contractors and Crew Leaders: Establishments primarily engaged in supplying labor for agricultural production or harvesting. Establishments primarily engaged in machine harvesting are classified in Industry 0722.
- Crew leaders, farm labor: contract
- Farm labor contractors
Farm Labor Contractors Insurance - The Bottom Line
farm labor contractors insurance is designed to comply with labor laws, mitigate your risk and maximize your business' ability to focus on carrying out the operations to make it successful.
Additional Resources For Agribusiness Insurance
Learn about small business agribusiness insurance - a type of commercial insurance protects farmers against loss of, or damage to crops or livestock.
- Insurance Farming Terms Glossary
- Aquaculture Fish Farm
- Commercial Fishermen
- Dairy Farm
- Equine & Horse Farm
- Farm And Ranch
- Farm Equipment Dealers
- Farm Labor Contractors
- Livestock & Cattle
- Mushroom Farms
- Nursery And Greenhouse
- Nut Farm
- Orchards & Groves
- Poultry Farm
- Sheep & Goat Farm
- Swine, Hog & Pig Farm
- Tobacco Farm
- Specialty Farm Risks
The agribusiness industry is a vital sector of the global economy, providing food, fiber, and other essential products to people around the world. However, it is also a complex and risky industry, with many potential sources of loss and damage. This is why the agribusiness industry needs commercial insurance.
One major risk in the agribusiness industry is natural disasters, such as floods, droughts, and hurricanes. These events can devastate crops and livestock, leading to significant financial losses for farmers and other agribusiness owners. Business insurance can help protect against these losses, providing a financial cushion to help businesses recover and continue operating.
Another risk in the agribusiness industry is the potential for accidents or injuries on the farm. Farming can be a dangerous occupation, and accidents can occur while working with heavy machinery or handling animals. Insurance can help cover the costs of medical treatment, lost wages, and other expenses related to these accidents.
In addition to these risks, the agribusiness industry is subject to various legal and regulatory requirements, such as food safety standards and environmental regulations. Noncompliance with these requirements can result in costly fines and legal action. Insurance can help cover the costs of legal fees and settlements, protecting businesses from financial ruin.
Overall, the agribusiness industry needs insurance to protect against the various risks and challenges it faces. Without commercial insurance, businesses in this industry would be vulnerable to financial losses that could threaten their survival. By investing in insurance, agribusiness owners can safeguard their businesses and ensure their continued success.
Minimum recommended small business insurance coverage: Buildings, Business Personal Property, Crop Insurance, Employee Dishonesty, Accounts Receivable, Computers, Goods in Transit, Mobile Equipment, Valuable Papers and Records, General Liability, Environmental Impairment, Umbrella, Business Automobile Liability and Physical Damage, Hired and Non-owned Auto & Workers Compensation.
Other commercial insurance policies to consider: Business Income and Extra Expense, Earthquake, Equipment Breakdown, Farm Owners, Flood, Computer Fraud, Employee Dishonesty, Forgery, Money and Securities, Cyber Liability, Employee Benefits, Employment-related Practices Liability, Product Recall, Underground Storage Tank, Stop Gap Liability and Unmanned Aerial Vehicles (UAV) (Drones).