I came across this great though anonymous quote on the Internet: “Needing insurance is like needing a parachute. If it isn’t there the first time, chances are you won’t be needing it again.” I have discussed risk in this column a few times, but never insurance. In my opinion, insurance and risk go hand and hand.
Let’s recap. Risk is an exposure to danger; an exposure to something of value to danger, harm or loss. While some of you may enjoy taking the occasional risk for the adrenaline rush, I am sure all of you would agree that there is no joy in the risk of losing your home, your car or any other personal belongings you have worked hard to obtain. Insurance is there to help you preserve profit, your items of value and help your business grow. Insurance protects against a possible adverse events and passes along the risk to a third party, your insurance provider. Your insurance provider will assume that risk to the amount of your insurance coverage.
For those of you who operate farm gate operations, there is considerable benefit to having insurance in place. When I refer to farm gate operations, I mean those farmers whose main source of revenue is from sales of their agricultural products sold directly to the consumer by the farmer, typically from a farm shop on the farm itself. Farm gate operations are often family owned and operated and the revenue from the sales contributes directly to the farm’s income. It may in fact be the sole source of farm income.
From my own personal experience as a very part-time orchardist whose sole source of farm income is farm gate sales, there are many benefits to this type of operation. It’s quite enjoyable to have one-on-one conversations with buyers of our fruit regarding our farm practices, watch our children make instant friends with the children of buyers who have chosen to pick their own fruit, and experience the pride of having buyers return to our farm to buy more produce because they have so enjoyed our fruit and the personal experience they receive when they buy farm-gate. But then there is the lawyer in me thinking, RISK!
What if someone falls off a ladder when picking fruit? What if someone slips and falls when walking on damp grass? What if someone not paying attention walks into a low branch and knocks himself out? When I speak of insurance for farm gate operations in this context, I am not speaking of crop insurance or farm building and content insurance (each of which is important), but liability insurance to protect the farmer (their spouse, children and employees) from potential farm gate buyer claims of negligence which has led to bodily injury or property damage.
A typical homeowner’s policy will often protect against slips and falls, but this type of policy will likely not extend to and may be insufficient for farm gate operations. Review your farm insurance policy. Ensure your coverage extends to liability which should include both property damage and bodily injury including resulting death. You, your spouse, your minor children and employees should be covered. Confirm your policy includes payments for compensatory damages as well as legal costs to defend you in a law suit. Make sure your coverage is sufficient to give you peace of mind in the event of a claim against you.
Speak to your insurance agent or broker regarding the details of your policy and ensure it meets your needs. See your lawyer regarding your farm gate operation to further assess your insurance needs and business operations.