The law regarding liability of property owners is ever-changing. There are ways to help reduce liability which can in turn help to keep down insurance premiums. Your insurance needs should be evaluated at least annually for the following reasons: 1) Ensure that there are no new products on the market which may better serve your needs; 2) Many insurance companies have risk managers who will go to a property to evaluate risks and ways to reduce risk which will in turn reduce the potential for liability; and 3) Discuss any changes that you may be making to your farm such as new purchases of equipment, leasing out a mobile home or building a new structure to ensure that you have the proper coverage. People usually purchase a policy and then request that it be renewed annually without giving consideration to how you and your agent can work together as a team to reduce your exposure and be certain you have proper coverage.
A benefit many insurance policies provide is that if you do get sued for a claim, the insurance company will pay the attorney fees of the attorney who is hired to represent you. One of the best ways to help the attorney defend your interests is to ensure that you keep proper records. For example, a landowner can be held liable for livestock that has escaped, causing an accident. One of the theories of liability that is often asserted in such cases is the failure to have adequate fencing. Section 272.050, R.S.Mo. provides that a “sufficient enclosure” is “Any fence consisting of posts and wire or boards at least four feet high which is mutually agreed upon by adjoining landowners or decided upon by the associate circuit court is a lawful fence.” The statute further provides that all posts shall be set firmly in the ground not more than twelve feet apart, and that the wire or boards shall be securely fastened to resist livestock. Many fences have to be regularly maintained or repaired. Keep all receipts of any fencing materials you purchase for at least five years as those can help establish that you properly maintained your fences. Since personal injury actions in Missouri have a five year statute of limitations, it can be years after an accident happens before you are sued. If you do become aware of a potential claim, ensure that you photograph the area in question, whether it be a fence, livestock, roadway or both and maintain the photographs for at least five years so that you can provide them to your attorney if there is a claim or lawsuit. If the person involved in an accident is someone you know, do not assume that they will not make a claim or file a lawsuit.
It is also helpful to photograph parts of your property on an annual basis. I suggest that clients do this at the same time as they are doing an annual review of their insurance needs. Some insurance companies will do this for you at the time of renewal, but many will not. Use your annual review of your insurance needs as a time to photograph some of your regularly used equipment, structures and fences in which you regularly keep livestock. Having photographs showing the condition of your property on an annual basis can often go a long way in defending a lawsuit.
Many farmers lease their property, or lease from others. Be sure to annually review your lease provisions. You should also make your insurance agent aware of any leases you have as you may need to be listed as an additional insured on the tenant’s policy, or the tenant may need to be listed on your policy.
Laurel Stevenson is with Lathrop & Gage LLP, in Springfield, Mo.
