As a farmer who offers public access to your premises, you must pay special attention to your liability insurance. A farm and ranch insurance policy with premises liability coverage is a good start.
Premises liability is a broad term for protection against claims when someone is injured on your property or when their property, such as a vehicle, is damaged due to your actions or negligence. It is mostly used for slips and falls and is a good base insurance protection.
However, if your farm or orchard is open to the public for produce picking, you likely need an enhanced kind of liability insurance.
Agritourism is one name for such coverage. In some states it can be added to your overall farm insurance as an “endorsement.” In other states, you might have to buy agritourism or agribusiness coverage as a stand-alone policy. It’s a good idea to use an insurance agent or broker who has experience in agritourism insurance since policies vary by insurer.
Moreover, each state has its own laws regarding gleaning and liability, so any insurance you buy should comply. Your farm must also implement procedures and rules for staff and visitors according to the law.
Note that crop insurance and farm/ranch insurance do not insure damage done to your property, crop or livestock by guests. Nor do they insure liability you take on by having gleaning or pick-your-own activities.
When it comes to coverage for your buildings, equipment and machinery, your farm/ranch insurance might exclude coverage for anything used exclusively for agritourism.
For example, a tractor used mostly for normal farming may be covered by farm/ranch insurance even if used periodically for gleaning or pick-your-own activities, but that’s not always the case. And if you have equipment, such as juicers to press fruit into beverages for guests who have picked their own produce, that would likely not fall under your farm insurance. Your agent can help you understand the details and what property needs to be insured under your agritourism insurance.
The liability benefits of an agritourism policy include medical payments coverage for guests injured while gleaning or picking produce. An agritourism policy will also cover costs to repair damage done to guests’ property due to your actions or negligence. And it will help with legal fees if you are sued for an injury or damage.
If you are in a state that exempts farm employees from workers’ compensation insurance mandates, you may wish to add employers liability coverage to your agritourism policy. Keep in mind that if a guest injures an employee, you could be found financial responsible. Without workers’ compensation or employers liability coverage, you would have to pay medical bills, lost wages, and maybe even disability compensation, out of your own finances.
Product liability is another aspect of agritourism that you need to consider. Imagine a person becomes ill because of bad produce or a prepared product purchased at your farm. You could face a product liability or foodborne illness claim that demands you pay medical bills and other costs associated with the sickness. There are various causes of produce-related illness, including pesticides, exposure to detritus, bacteria or mold, and improper handling. You can guard against many but not all, so product liability insurance is important.
Reduce liability risk by requiring waivers
To protect your assets against injury and illness lawsuits resulting from gleaning or pick-your-own activities, require every guest to sign a waiver. A waiver is a legal document acknowledging the inherent dangers of an activity and indemnifying you and your business should an injury or illness result from the agritourism activity.
Have a lawyer draw up the waiver, since laws on the validity and durability of waivers vary by state.
In some states, you must post a government-approved notice or provide guests with wristbands that detail the state’s hold-harmless law in addition to getting a signed waiver. In some cases, the back of the purchased ticket can be used instead of a wristband. Keeping a file of signed waivers is a crucial step in protecting your business. You should also post notices not to consume unwashed produce.
Liability exemptions for nonprofit gleaning organizations
If your farm has no income-based harvesting activity and allows gleaning only to feed the needy, you might not need agritourism insurance.
The Federal Crop Insurance Corporation encourages you to allow gleaning for the needy on your farm, and some states have statutory liability protections for farmers who allow nonprofit volunteers to glean. But laws vary by state, and there are restrictions on who is permitted to gather crops and which crops are eligible.
You should contact your county farm service agency before allowing nonprofit gleaning under federal crop insurance or the Noninsured Crop Disaster Assistance Program. In fact, your insurance program may require you to.
If you allow nonprofits to glean on your farm, know that laws frequently stipulate you cannot receive compensation for the produce. You can be compensated for your labor, equipment or fuel if you harvest the nonsaleable product and donate it, but the product itself may not generate income. These rules differentiate gleaning to feed the needy from for-profit gleaning and pick-your-own activities. Discuss these with your lawyer and insurance agent when placing your overall insurance program.
Steps toward safety
There are steps you can take to reduce your liability risk from gleaning and pick-your-own farming activities. Here are a few examples:
- Reduce slip hazards in restrooms, pathways and shops.
- Ensure fencing, gates and produce crates have no puncture or cut hazards.
- Have parking attendants or clearly marked parking lots.
- Lock all machinery and allow only trained employees to operate it.
- Practice food safety and follow all health department rules.
- Make handwashing facilities accessible.
- Fence off all “attractive nuisances,” such as haylofts, ponds, equipment and animals.
Contact us today, and we’ll assist you in navigating the necessary safety measures, ensuring signed waivers, adhering to state and federal laws, and obtaining the right insurance. We’re here to help you optimize your crop yields and safeguard your business against potential financial risks.