When it comes to liability insurance for the farm or ranch, there are an awful lot of things one could be liable for.
Don McClure, manager for insurance education and special resources with Farm Bureau Mutual Insurance Company of Arkansas, ran down the list.
“Typically, you’re not only talking about farm premises exposure but equipment exposures, worker injury exposures, exposures to the public, exposures to third party vendors and other company employees that may be on the premises,” he told Ozarks Farm & Neighbor.
Agents will ordinarily write a specific farm package-type policy that would address not only liability exposures, but also property exposures and worker exposures. Some companies, McClure said, will attach a farm package to coverage of a primary residence, but more often than not, it’s a separate policy.
When asked how much coverage a producer needs, McClure joked, “I try to be evasive. I don’t tell people how much they need; I tell them what’s available, and let them make the decision. Most companies will write upwards of $1 million in liability coverage, and then perhaps may even write excess coverage through an umbrella.”
For employees, Farm Bureau recommends workers’ compensation coverage. Even though in some states farm employers are exempt from being required to carry workers’ compensation, McClure said it’s a wise decision to carry it. If they don’t buy workers’ compensation, most farm packages would have an employer’s liability aspect that normally would apply to farm employees, although a separate endorsement is required to address farm employee exposure under a farm package policy.
An insurance policy won’t guarantee that you won’t get sued.
“It has provisions to defend the policy holder in the event that he is alleged to have caused somebody’s injury or property damage. The insurance carrier has an obligation to provide a defense,” McClure said.
“Ordinarily, family members of the named insured would not be included in the coverage if they were injured on the premises – or elsewhere, for that matter – under a farm liability policy.”
How about damage done by animals? That’s covered in the University of Missouri document, “Farmers’ Liability for Their Animals.”
The authors say ownership of domestic animals – and livestock, which are ordinarily harmless to people, fall under that category – carries certain legal liabilities in cases ranging from cattle breaking through a fence and damaging the neighbor’s corn, or being struck by a car.
The owner’s liability for damages could hinge on whether the animal escaped from an exterior fence, along a road, or a division fence between adjacent landowners. In that case, it may have to be decided whose responsibility it was to maintain the part of the fence through which the animals passed.
For animals that get onto the highway, the document said, “If you are negligent in maintaining your fences and allow your animals to escape onto the highway, your liability exposure is increased. You can be liable to motorists using the highway for damages that occur when they collide with such animals, provided the driver himself was not negligent.”
Even in the absence of all of those conditions, the owner could be liable if he knows the animals have escaped and fails to remove them from the highway within a reasonable period of time. And under Missouri law, even if the owner has not been negligent, he may still be responsible for damage done by escaped livestock.
