Why You Need Additional Liability Coverage For Your Ag Operation
March 20, 2025Every type of property, business, operation, etc. has unique risks. Mistakes and accidents can be costly. This is particularly true in agricultural and agritainment operations. Even something as simple as a loose fence post or an unlatched gate has the potential to cause costly issues. In addition to common farm and ranch insurance coverages, sufficient liability coverage is essential for ensuring you are insured and protected against these risks. All ag operations are different and some may require liability coverage above and beyond the “standard”. Here are a few potential reasons why you need additional liability coverage for your ag operation:
1. You Share Resources With Other Farmers
Farming communities are often close-knit, especially in areas where you have several legacy family farms in an area. Particularly in these areas, neighboring and nearby farms will often work together. Perhaps a neighboring ranch pays you for the use of a field to raise livestock or maybe you have equipment your neighbors don’t need in their day-to-day operations and they hire you seasonally to bring that equipment to their property and complete mechanical operations?
These types of relationships are a common way to pool resources in a farming community in valuable and helpful ways. However, these activities are also additional business operations; contract feeding/custom feeding and contract farming/custom farming respectively. In both of these situations, you would likely need to require additional business liability coverage, like Care, Custody, and Control Insurance (CCC) or other special coverages.
2. You Have Employees and/or Work With Custom Operators
One of the most common reasons ag operations need additional liability coverage is employees or hired operators. In addition to creating and maintaining a safe working environment, you will need to obtain workers compensation insurance for the farm and there may be other coverages to consider depending on your operations and situation.
In some cases, a standard farm workers compensation policy will be enough. In other cases, there may be other things to consider. Because there is so much involved with ag operations and each one is unique, farm and ranch work is known to create unique situations with worker’s comp as well. Independent contractors and custom operators are just some of the unique workers compensation scenarios around the farm that your insurance coverage may need to address.
There are also things to consider when managing youthful employees and operators on the farm, even when they are family. It’s common on family farms for younger family members to be helping out. In farming communities, local farms can be great job opportunities for minors to learn valuable ag skills and gain experience.
In any of these cases, there will be additional considerations for creating policies, standards for operations, insurance, and more because the person doing the work is a minor. Your best bet is to discuss details with your insurance agent so you can rest assured that you are not missing any necessary coverage for a specific situation.
3. Your Ag Operation Requires the Use or Transport of Chemicals and/or Manure
Animal waste, like manure, and chemicals, like pesticides and fertilizers, are necessary materials for agriculture. In addition to growing and managing crop yield and health, these are also important for responsible pest management in the food chain.
Even with careful regulations and standards when transporting and using these materials, accidents can still happen. Containment measures can become damaged or rupture, application issues can arise, storms can result in unforeseen consequences, and more.
These are all reasons your ag operation may need additional liability coverage. In addition to potentially higher-than-standard limits, these are also reasons why modern farmers need pollution liability coverage. If something were to occur, these coverages may be able to step in and assist with the financial ramifications of an event and prevent devastation to your ag operation.
4. You Prepare and Sell Food Products Direct-to-Market
Whether you have a small roadside stand, a dedicated store or shop building on your property, or take your products to a farmer’s market, your ag operation is now engaged in preparing and selling food products directly to the public. This adds direct-to-market or direct farm marketing as an additional business operation. And, there are liability exposures for various aspects for which you may need additional liability coverage to remain insured and protected.
Depending on what you are selling, how, and where, there may also be other coverages you need to consider. You will also want to talk to your insurance agent to make sure you have product liability insurance. This coverage is usually included in general liability policies, but you will want to verify that it is, that the limits are sufficient for your needs, and determine whether you also need to add umbrella liability or increase your current umbrella liability limits.
Whether it’s protecting products during transport, making updates on your property to make it safer for public access, and more, there are things you will want to address to lower risk, avoid frivolous liability claims, and make sure your insurance is offering sufficient coverage for your needs. An insurance agent with ag experience can be an invaluable resource to help identify these opportunities for your ag operation and help navigate the next steps.
5. Your Ag Operation is Open to the Public
Many farmers and ranchers expand their ag operations to offer activities that are open to the public. U-pick, or pick-your-own, offerings, hayrides, corn mazes, pumpkin patches, farm tours, and more are all ways to open your ag operation to the public and welcome them onto your property.
This turns a farm, vineyard, orchard, etc. into an agritainment, or agritourism, operation. It also adds additional business operations as well as liabilities and risks that your insurance coverage needs to address. There are differences between an Agribusiness policy and a Farmowners policy.
New additions or new business operations are key signs you need to review your farm insurance policy. In some cases, you may be able to adjust your current policy to accommodate the new additions while you may need to upgrade to a more robust agribusiness insurance policy in other cases.
A conversation with your insurance agent can be invaluable for determining what makes the most sense for your situation and operations. In addition to making sure you have the right insurance in place for your agritainment operations, they can also offer insights on other ways to help lower your risk and protect your agritainment investment.
6. You Use Your Property For Additional Business Operations
Outside of agritainment-type attractions and activities, you may also use your ag operation to run additional business operations. For example, if you have a horse ranch, you might rent out stable space, offer horseback riding lessons, breed horses, etc.
These are all other business operations that have their own risks and considerations for various types of insurance coverage and liability coverage. When offering lessons on your property, for example, you may need to explore specific coverage, like equine professional liability.
Even something like selling firewood on your property is considered a business venture and could leave you exposed if there are coverages you need and you do not have them when a claim arises. It’s important to discuss all aspects of your ag operation with your insurance agent to make sure your insurance coverage is properly and sufficiently covering your ag operation and any side businesses you may run.
Make Sure Your Ag Operation is Properly Insured With Ruhl Insurance, a Division of Horst Insurance
These are just a few reasons why you need additional liability coverage for your ag operation. Because every operation is different and will have unique characteristics and risks that farm and ranch insurance needs to address, it’s a good idea to talk to an insurance agent.
They can help make sure that you have the right types of farm insurance coverage and the appropriate limits to protect your livelihood in the event of damage or a loss. This type of individualized attention and information is one of the big benefits of working with an independent insurance agent, especially one who has in-depth ag experience.
If you have questions about insurance for your ag operation, contact Ruhl Insurance, a Division of Horst Insurance at 717-665-2283 or 800-537-6880. We can help you make sure your ag operation is properly insured and protected.
Disclaimer: Information and claims presented in this content are meant for informative, illustrative purposes and should not be considered legally binding.