Tobacco Farm Insurance Hawaii Policy Information
Tobacco Farm Insurance Hawaii. Tobacco has been a cash crop for in the United States, even before the country was officially formed. In fact, it wasn't until European settlers arrived in North America that the rest of the world learned about tobacco and were taught how to use it and farm it by the Native Americans.
Since that time, tobacco has made its way around the globe and is used by people in every corner of the world. Chewing tobacco, cigarettes, cigars; if you're a tobacco farmer, you supply the primary ingredient that's needed to make these popular products.
Tobacco farms produce leaves that can be made into cigars, cigarettes, chewing tobacco, pipe tobacco, and snuff. At harvest time, the tobacco leaves are removed from the stems of the plants, cleaned, and cured in large, well-ventilated barns. Curing can be solely by air or by using controlled fires placed below the leaves.
Flavoring agents may be added during the curing process. Some farmers then arrange transport of the cured leaves to a nearby tobacco sales auction warehouse. Others are under contract with a tobacco manufacturer and transport of the leaves is based on the terms of the contract.
Tobacco farms depend on several chemical applications such as fertilizers, fungicides, herbicides, and pesticides. Pickers, tillers, tractors, and other types of farming machinery are required to support production.
While the work of a HI tobacco farmer is important and the crops that you provide are always in-demand, just like any other business owner, you face a variety of risks.
In order to protect your business, your employees, the people your business services, and yourself, investing in the right type of tobacco farm insurance Hawaii is vital.
Why do tobacco farmers need insurance? What kind of coverage do they need? Let's take a look so that you can find out how you can properly protect your operation.
Tobacco farm insurance Hawaii protects your tobacco farming operations from lawsuits with rates as low as $67/mo. Get a fast quote and your certificate of insurance now.
Why Do Tobacco Farms Need Insurance?
As a HI tobacco farmer, you face numerous risks. Your employees could sustain work-related injuries. A third-party could file a lawsuit against you, citing that you were responsible for property damages or personal injuries that they experienced. Your farm could be damaged by an act of nature. The equipment you use to operate your farm could breakdown, become lost, or be stolen.
These are just a few of the risks that tobacco farmers face, and as the owner and operator of your organization, you are liable for any issues that may arise – as well as the big price tags that may be attached to them.
If you aren't properly insured and something goes wrong, you could be looking at serious financial losses. If, however, you have the right kind of insurance coverage, if something unexpected happens, instead of having to pay the related expenses yourself, your insurance carrier would cover them for you.
In other words, tobacco farm insurance Hawaii can help you avoid serious financial losses.
Additionally, tobacco farmers are required, by HI law, to carry certain types of insurance policies. If you fail to have the necessary coverage, you could end up facing stiff penalties, and even run the risk of having your farm shut down.
What Type Of Insurance Do Tobacco Farmers Need?
Just like any other business, the specific type of insurance tobacco farmers will need depends on a variety of factors; where your farm is located, the size of your farm, and the type of businesses you sell your products to, for example.
Since tobacco farm insurance Hawaii needs for vary, it's important to speak with an experienced agent who specializes in commercial farming insurance to make sure that you have the coverage that's needed to properly protect your operations.
With all of that said, however, here's a look at a few of the different types of coverages that tobacco farmers will usually require:
- Commercial General Liability: As a tobacco farmer, there is a chance that you could end up being hit with a lawsuit at one point or another. Commercial general liability insurance is specifically designed to protect business owners from third-party property damage and personal injury claims. For instance, if a vendor were to suffer an injury on your farm and follow a lawsuit against you, this insurance coverage would help to pay for the related expenses.
- Product Liability: As a tobacco farmer, you'll also need product liability insurance. In the event that the products you sell cause an illness or an injury and a consumer or business that you supplied the products with filed a lawsuit against you, this type of insurance would help to cover the related costs.
- Workers' Compensation: You rely on your employees to keep your tobacco farm running smoothly, and your employees rely on you for providing them with a safe work environment. If a member of your team were to develop a work-related illness or injury, you would be responsible for their medical care and any wages they might lose. Workers' comp insurance would help to cover those types of expenses.
These policies are just a few examples of the type of tobacco farm insurance Hawaii you'll need to carry as the owner and operator of an HI Tobacco farm.
HI Tobacco Farmers' Risks & Exposures
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.
Premises liability exposure is normally low due to limited access by visitors. 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.
Products liability exposure is low. Tobacco products receive a federal exemption from most types of product liability claims because tobacco has been a known carcinogen since the 1960's.
If the farm sells directly to consumers, extensive warnings and labels are required on all finished goods alerting users as to the product's dangers. While some lawsuits have prevailed in lower courts, appellate courts have generally upheld the federal exemption enjoyed by tobacco farmers and manufacturers.
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, 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 tobacco farms are very labor-intensive. Work may be required for long hours and in all kinds of weather conditions. 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. Cumulative exposure to tobacco dust creates a potential for lung and respiratory diseases and injuries. Injuries can result from falls or from loading and unloading vehicles.
Property exposures depend on the size of the operation, type of tobacco 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 can overheat or become jammed, and severe winds and tornados may destroy property in certain geographical areas.
Buildings may collapse under the weight of stored tobacco. Tobacco farms are in rural areas where fire response time may be slow and a water supply to douse a fire may be undependable. The business income exposure can be high as operations are seasonal and some equipment may be difficult to repair or replace quickly.
Tobacco may be targeted by thieves due to the high resale value in the black market. Vandalism can result from trespassers and protestors.
Appropriate security controls must be taken including physical barriers to prevent entrance to the premises after hours and an alarm system that reports directly to a central station or the police department.
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 the customers are billed, computers, goods in transit, mobile equipment, and valuable papers and records for seed source information, records needed to substantiate FDA requirements, quality control and product information that may be needed in case of a recall.
Backup copies of all records should be made and stored off premises. Goods in transit may be damaged by fire, theft, collision and overturn, or contamination. 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.
Commercial auto 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.
Tobacco Farm Insurance - The Bottom Line
To discover exactly what kind of tobacco farm insurance Hawaii coverage you'll need to fully protect your operation, speak with a reputable broker who specializes in commercial farm insurance.
Hawaii Economic Data, Regulations And Limits On Commercial Insurance
Location is one of the most vital factors that prospective business owners need to take into consideration when they are thinking about establishing an operation. You can have the best possible products and offer the most exceptional services, but if the location doesn't offer a market that can benefit from those goods and services, your business will have difficulty thriving.
As such, if you are an entrepreneur who has set your sights on Hawaii for the headquarters of your business or a new division of an already existing corporation, it's a good idea to familiarize yourself with the state's economic data. It's also important to understand what type of commercial insurance you will need to invest in to protect yourself, your employees, your vendors, and the clients you serve.
Below, we provide a brief overview of important economic data and the commercial insurance requirements for business owners in the Aloha State.
Economic Trends For Business Owners In Hawaii
A state's unemployment rate is a good indicator of the overall economy of the region. It indicates that there are enough jobs available to support the economy, which is a direct reflection of the success of businesses in the state. As of 2019, the Bureau of Labor Statistics indicated that the unemployment rate in Hawaii was 2.6%, 0.8% lower than the national average of 3.4% from the same timeframe. This rate has also decreased throughout 2019, as it was 2.8% in July of 2019.
As with most states, the best locations to start a business in the state of Hawaii include urban areas and the suburban regions that surround them. The top cities for business owners in HI include:
- Pearl City
While several industries do well in Hawaii, certain sectors thrive. Tourism has long been the leading industry in the state, as people from around the globe flock to Hawaii each year.
Agriculture is also a booming industry here; the state is the second largest producer of sugar can in the U.S. Defense is also a key sector here, as all branches off the armed forces have bases located in the state. Another industry that also thrives here is manufacturing; specifically the manufacturing of cotton-based goods, such as clothing.
Commercial Insurance Requirements In Hawaii
The Hawaii Department of Commerce and Consumer Affairs regulates insurance in HI. Hawaii mandates very few forms of insurance coverage by law. They enforce worker's compensation.
Hawaii requires you to have worker's compensation insurance if you hire even one employee on a regular basis. This includes part-time employees, family members, minors, and immigrant employees. It is not required for independent contractors or domestic employees, though you should check to make sure any contractors you have are true contractors, and not employees.
Hawaii also requires all business-owned vehicles to be covered by commercial auto insurance. Other types of business insurance that business owners should carry depend on the specific industry.
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
- What Are Farm And Ranch Insurance Endorsements?
Farming is, and has always been a tough business. There are many uncontrollable factors for farmers to deal with - like the weather, vermin, or other natural catastrophes. Any of these can destroy cash crops, such as corn, cotton, soybeans, and wheat, and put the farmer in a very bad financial situation.
Insurance for agribusiness falls into three general categories:
The first is property insurance on the buildings and the usually substantial amount of business personal property made up of machinery, livestock, equipment and other stock.
The second is liability for both premises and products.
The last is protection for worker injuries. Commercial auto insurance should be written if the operation owns vehicles and especially if it transports its own products.
There are a wide variety of agribusiness insurance options that are available to farmers. These policies allow them to to receive compensation in the event of a poor growing season, dropping prices, cattle disease or catastrophic natural event.
Loss of crops or livestock can financially ruin an agribusiness operation. The crop insurance agrees to indemnify the farmer, rancher or grower against losses which occur during the crop year. Losses have to be caused by things which are unavoidable or beyond the farmer's control - like a drought, freeze and/or disease.
Some policies offer coverage due to adverse weather events such as the inability to plant due to excess moisture or losses due to the quality of the crop.
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).
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