Nut Farm Insurance Policy Information
Nut Farm Insurance. Walnuts, cashews, peanuts, almonds; nuts are a vital source of nutrition and a central component of a healthy, well-balanced diet. Nuts are consumed by people around the globe on a regular basis.
Not only are they consumed in their raw form, but nuts are also a key ingredient and numerous other types of food. Given the fact that the entire world relied on nuts, as a nut farmer, it's safe to say that you provide an invaluable service.
However, while your business is vital, it isn't without risks. As the owner and operator of your nut farm, you are liable for any issues that may arise. How can you protect yourself from those risks? By investing in a comprehensive nut farm insurance policy.
Nut farms grow their produce on trees or in the ground. Tree nuts include almonds, cashews, coconuts, chestnuts, filberts, hazelnuts, hickory nuts, macadamias, pecans, pine nuts, pistachios, and walnuts, while peanuts are grown underground.
Some tree nut farms have retail operations where customers visit the premises, including "You Pick It" operations. At harvest time, tree nuts must be blown or shaken off the trees, either by hand or using mechanical pickers. Peanut plants are uprooted, and the peanuts allowed to dry before being threshed from the plants.
The tree nuts or peanuts are dried, cracked open, and cleaned. They may be boiled, roasted, salted, or be processed into oils or spreads. Some are used for making paint, polishes, or silage.
Nut farms depend on natural substances such as compost and manure to be successful, plus a number of chemical applications such as fertilizers, fungicides, herbicides, and pesticides. Pickers, tillers, tractors, and other types of farming machinery are required to support production.
At harvest time, the farmer either drives the produce to processing plants or hires a carrier to transport them. Nut farms are regulated by the FDA.
Why do nut farmers need insurance? What type of coverage should they carry? Read on to find out more and to learn how you can protect your business, your employees, consumers, and yourself from the many risks that your industry faces.
Nut farm insurance protects nut farmers from lawsuits with rates as low as $47/mo. Get a fast quote and your certificate of insurance now.
Below are some answers to commonly asked nut farming insurance questions:
- What Is Nut Farm Insurance?
- How Much Does Nut Farm Insurance Cost?
- Why Do Nut Farms Need Insurance?
- What Type Of Insurance Do Nut Farmers Need?
- What Does Nut Farm Insurance Cover & Pay For?
What Is Nut Farm Insurance?
Nut farm insurance is a type of agricultural insurance that specifically covers nut-producing farms. This insurance protects the farm, crops, and equipment from potential losses due to natural disasters, disease, theft, or other unforeseen events. Coverage may also include liability protection for the farm and its employees. This insurance is designed to help nut farmers protect their investment and keep their operation running smoothly in the event of unexpected circumstances.
How Much Does Nut Farm Insurance Cost?
The average price of a standard $1,000,000/$2,000,000 General Liability Insurance policy for small nut farms ranges from $47 to $79 per month based on location, acreage of crops, operations, claims history and more.
Why Do Nut Farm Need Insurance?
Just like farmers of any other type of crops, nut farmers are faced with a variety of risks. Your crop could be damaged by an act of nature - a hurricane, a flood, a tornado, or a wildfire, for example. Your crops could also be ransacked by animals or other pests that may pick your fields dry and leave you with nothing.
Wrongdoers could potentially break into your farm and rob your commercial property of the equipment and tools that you use to keep your nut farm operational.
There's a chance that you could have to shut down operations for a period of time, which would result in a major loss of income, or one of your employees could sustain a work-related injury that requires medical treatment, and may not be able to work while they are recovering.
The above are just a few examples of the risks that nut farmers face. As the owner and operator of your farm, you are legally responsible for all of the costs that are associated with these risks, and those costs could be exorbitant.
If you had to pay for such expenses out of your own pocket, there's a good chance that you could end up in financial ruin. That's why having the right type of insurance coverage is so important; with the right type of nut farm insurance coverage in place, if an issue does arise, instead of having to pay for related costs yourself, your insurer would cover them for you.
In other words, insurance could help to save you from serious financial losses.
What Type Of Insurance Do Nut Farmers Need?
The specific type of nut farm insurance coverage that nut farmers need depends on a variety of factors; the location of your operation, the specific type of nuts that you grow and harvest, the size of your farm and the amount of people you employ, for example.
Because needs vary, speaking with a reputable agent who specializes in commercial insurance is highly recommended. An agent will be able to help you determine exactly what protections you need and exactly how much coverage you should carry.
That said, here's a look at some of the different types of coverage that most nut farmers should have in place:
- Commercial Property - One of the most important type of insurance that nut farmers need to carry is property damage insurance. This type of coverage protects you from any damages to your property that may occur; for example, if fire were to break out in one of your warehouses and damage the building and some of your machinery and equipment, this type of coverage would help to pay for the related costs.
- Crop Insurance - Coverage for your crops is another vital component of a robust nut farmer insurance policy. This type of coverage, as the name suggests, protects your crops. In the event that they are damaged or compromised for any reason, this type of coverage will help to pay for the related losses.
- Business Interruption - Should your farm need to be shut down for any reason, business interruption insurance would help to replace the income you would lose until you could reopen for operation.
These policies are just a few examples of the type of nut farm insurance you'll need to carry as a nut farmer.
Nut Farmers' Risks & Exposures
Premises liability exposures are generally low. The operation of farming equipment and ATVs not subject to motor vehicle registration falls under premises liability, not automobile liability, even when being used on public roads.
Poor rural road conditions combined with heavy or awkward equipment and occasional operation by underage drivers can result in accidents.
Group tours, retail stores, and frequent visits by agriculture agents, chemical applicators, mechanics and inspectors increase the exposure. Visitors may be injured due to uneven walking surfaces, inadequate housekeeping, farm machinery, and confined or closed spaces.
Some nut farms include a "You Pick It" operation which requires additional protections for those picking and any young children who accompany them. Clear guidance must be provided as to where picking can take place and the areas where the pickers can venture. Barriers must be in place to prevent young children from entering dangerous areas.
Products/completed operations liability exposures are moderate due to the possibility of allergic reactions and contaminated produce from the use of chemical applications. Any processing of nuts into spreads or other food items must be handled in a sanitary manner to prevent foreign objects from getting into containers.
Only FDA approved pest control chemicals should be used. Nut products, particularly peanut products, may produce allergic reactions in some customers. All nuts for sale should be properly labeled.
Environmental impairment liability exposures can be high due to the potential for air, land, or water pollution from the use of agricultural chemicals and pollutants such as insecticides, fungicides, pesticides, and herbicides, fuels for machinery and motor vehicles, refrigerants, and solvents.
Use and disposal of all chemicals must be documented and meet all FDA and EPA standards. If there are underground storage tanks, a UST policy will be required.
Workers compensation exposures are very high as nut farms are very labor-intensive. Work may be required for long hours and in all kinds of weather conditions. Harvesting and tree pruning are done at heights, increasing the risk of falls. Workers may be seasonal, underage, speak another language, and/or lack adequate training and supervision.
Working around farm machinery, tools and equipment can result in a variety of injuries ranging from minor to severe. Slips, trips, falls, back injuries from lifting, broken bones, foreign objects in the eye, hearing impairment from noise, and muscle strains are common. Exposure to farm chemicals and organic dust can lead to respiratory issues. Workers could experience allergic reactions from exposure to tree nuts or peanuts. Injuries can result from falls or from loading and unloading vehicles.
Property exposures depend on the size of the operation, type of nuts stored, and the number and types of buildings.
Ignition sources include faulty electrical wiring, fuel, heaters, and smoking. Wiring must be up to date and well maintained. Lightning may strike buildings unprotected by rods and GFIs, dryers and presses can overheat or become jammed, decaying organic material may spontaneously combust, burning operations may spread, and severe winds and tornados may destroy property in certain geographical areas.
Buildings may collapse under the weight of stored produce. Nut farms are in rural areas where fire response time may be slow and a water supply to douse a fire may be undependable. Smoking should be prohibited. The business income exposure can be high as operations are seasonal and some equipment may be difficult to repair or replace quickly.
Crop exposures are high because unprotected plants grown in the open are susceptible to damage by animals, bacteria, drought, flooding, frost, fungi, hail, insects, lightning, snow, viruses, weeds, wildfire, wind, and winterkill.
While some of these can be mitigated by proper farming practices or chemical applications, others are considered fortuitous acts that can be covered by either crop/hail or multi-peril insurance.
Crime exposures are minimal. Most equipment and inventory is large, heavy, or difficult to remove undetected. Cash exposures are usually small unless there are retail operations. Employee dishonesty exposures are minor in family-owned and run operations.
Pre-employment background checks should be done on all outside employees having access to cash, checks, safes and equipment.
Inland marine exposures include accounts receivable if customers are billed, computers, goods in transit, mobile equipment, and valuable papers and records for seed source information, records needed to substantiate FDA requirements, and product information that may be needed in case of a recall.
Farm equipment stored in buildings can be damaged by fire, explosion, or collapse. Items stored in the open can be damaged by hail or winds. Goods in transit to offsite storage facilities or to customers can be damaged by overturn or collision, which may result in a total loss due to the possibility of food contamination.
Commercial exposures are moderate. Produce transport vehicles are heavy and awkward, especially on narrow rural roads. All drivers must have appropriate licenses and acceptable MVRs. Vehicles must be well maintained with documentation kept.
What Does Nut Farm Insurance Cover & Pay For?
Nut farms, like any other business, can be sued for a number of reasons. However, there are certain risks specific to their nature of operation. Below are a few examples of situations where nut farms might be sued, and how insurance can help cover the costs associated with these lawsuits.
1. Personal Injury: If someone is injured on the farm, the owner could be sued. For example, a visitor might slip on spilled nuts in the processing area, or a worker could get hurt by farm machinery. In such cases, General Liability Insurance can help cover the costs of the lawsuit. This insurance can pay for the injured person's medical bills, any property damage, and legal costs if the farm is sued.
2. Product Liability: If someone becomes ill after consuming nuts produced by the farm, the farm could be sued for damages. For instance, a consumer might contract a foodborne illness due to improperly processed or contaminated nuts. Product Liability Insurance is designed to cover these situations. It can help pay for legal fees, court costs, and any awarded damages related to the product's defect.
3. Worker Injury: Farm workers are often exposed to dangerous conditions. If a worker is injured or falls ill due to their work, the farm could be held responsible. Workers' Compensation Insurance can cover the medical costs and a portion of lost wages for the worker. If the worker or their family sues, this insurance can also cover the legal costs.
4. Environmental Damage: Farms can be a source of environmental pollution. For example, pesticides used on the farm could leach into local water supplies. If this occurs, the farm could be sued by affected parties or by regulatory authorities. Environmental Liability Insurance can help pay for the cleanup, as well as any legal costs associated with a lawsuit.
5. Crop Damage: Due to unexpected weather conditions or pests, crops may get damaged which can result in financial loss for the farm. While it may not lead to a lawsuit, it can still result in significant financial stress for the farm. Crop Insurance can cover the loss of crops due to these unforeseen events, ensuring that the farm can recover financially.
It's crucial for nut farm owners to understand the potential risks associated with their business and secure the right type and level of insurance coverage. This can help them manage risks and protect their business from potential financial losses.
Commercial Insurance And Business Industry Classification
- SIC CODE: 0139 Field Crops, Except Cash Grains, Not Elsewhere Classified, 0173 Tree Nuts
- NAICS CODE: 111335 Tree Nut Farming, 111336 Fruit and Tree Nut Combination Farming, 111992 Peanut Farming
- Suggested ISO General Liability Code(s):
- Suggested Workers Compensation Code(s): 0016 Farm - Orchard or Grove & Drivers
Description for 0139: Field Crops, Except Cash Grains, Not Elsewhere Classified
Division A: Agriculture, Forestry, And Fishing | Major Group 01: Agricultural Production Crops | Industry Group 013: Field Crops, Except Cash Grains
0139 Field Crops, Except Cash Grains, Not Elsewhere Classified: Establishments primarily engaged in the production of field crops, except cash grains, not elsewhere classified. This industry also includes establishments deriving 50 percent or more of their total value of sales of agricultural products from field crops, except cash grains (Industry Group 013), but less than 50 percent from products of any single industry.
- Alfalfa farms
- Broomcorn farms
- Clover farms
- Grass seed farms
- Hay farms
- Hop farms
- Mint farms
- Peanut farms
- Potato farms, sweet
- Sweet potato farms
- Timothy farms
- Yam farms
Description for 0173: Tree Nuts
Division A: Agriculture, Forestry, And Fishing | Major Group 01: Agricultural Production Crops | Industry Group 017: Fruits And Tree Nuts
0173 Tree Nuts: Establishments primarily engaged in the production of tree nuts.
- Almond groves and farms
- Filbert groves and farms
- Macadamia groves and farms
- Pecan groves and farms
- Pistachio groves and farms
- Walnut groves and farms
Nut Farm Insurance - The Bottom Line
To find out more about the nut farm insurance coverages you'll need as a nut farmer, speak with an reputable and experienced insurance agent who specializes in commercial farming insurance.
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).