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By Jane Eckert - Eckert AgriMarketing
In speaking to farmers across the country, and now working with the Kansas Department of Commerce on its statewide agritourism initiative, I have found one common challenge facing producers: liability insurance.
Farmers are having difficulty finding insurance carriers that will write liability policies. In fact, most of you are having problems even getting quotes or worse, even getting insurance agents to return your calls!
It seems that this issue of liability has become a bigger problem for some folks than selecting products, creating new activities or growing an agritourism enterprise.
So it’s time to crack the code on liability insurance!
I spoke with Steve Hall of Anderson, Hall & Marsh & company in St. Louis, Mo. Anderson, Hall & Marsh & Company is a commercial insurance “broker,” that contractually represents about 18 insurance companies and is licensed to place insurance in 42 states. The company has served as broker for my family’s farm for more than 26 years.
Here is how Steve answered the questions most frequently asked by farmers.
What’s the problem when farmers get into agritourism?
- When farmers go from traditional agriculture to agritourism, adding activities such as petting corrals, wagon rides, corn mazes, playgrounds, etc., they become entertainment enterprises. Once you allow people to enter your premises on a commercial basis all of the rules change and the farmer has to recognize that an entire new way of doing business is necessary.
- When farmers invite the public onto their property for these activities, they take on a different kind of risk
Why can’t farmers get liability insurance through their local insurance agents?
- Insurance agents in smaller communities typically represent smaller local insurance carriers and only a few, if any, large, well-known insurance companies.
- Large insurance companies believe that farmers as entertainment operators are a big risk because they won’t practice the proper safety standards needed to minimize losses nor do they have the expertise and skills required to handle public liability exposures.
- Since these companies have been hit hard recently, they are “cleaning-up their books” by getting rid of what they consider to be high-risk policies, such as agritourism liability.
- Also, there is no way for these large companies to develop a standard policy that fits all agritourism operations, since each one is different from the next. These companies prefer to cover similar types of commercial businesses and ones with which they are comfortable and understand.
What kind of insurance companies will cover farmers for agritourism liability?
- Farmers need to find an insurance company that will take on the unusual risks of agritourism. In the jargon of the insurance world, these carriers are called “excess and surplus lines companies.”
- Companies providing “excess and surplus lines coverage” are not the large, well-known, household name companies (Hartford, Travelers etc…) that typically want to avoid this type of risk. Rather, the E & S community specializes in difficult placements. Often these carriers are actually subsidiary companies of the big well-known insurance groups.
Can my local agent find this kind of coverage for me?
- Usually not. Your local insurance agent typically works only with one or two companies.
- You must find an insurance “broker” who represents multiple insurance carriers, some of whom will write “excess and surplus lines coverage.” Brokers typically can write policies in many states with a large number of companies.
How do I find an insurance broker?
- Ask your local agent. Your local agent understands the insurance system and knows how to access the insurance brokers.
- In many states you can call the state department of insurance, explain your situation and they can give you a list of people to call. You can also call the Independent Agents Association and they can refer you to someone in your area.
How high will the premium be?
- I can’t give any figures, since they would be different for each farm.
- The premiums will be higher than policies for traditional agriculture, but they will be based on the types of activities you offer. In the E & S business there will almost always be a Minimum Premium. That is, the company will not issue a policy for less than “$X”.
Who can I contact if I have questions or would like to get a quote?
Call Steve (314-991-8866) if you want a consultation or a quote.
Steve was very helpful in detailing why so many farmers are frustrated by finding liability insurance. Of course, if you have simple questions, give me a call at 314-862-6288. Liability is a real issue for agritourism operators. Even the USDA is paying attention.
Even better news if you live in Maryland, Pennsylvania, North Carolina, Ohio, Virginia or West Virginia.
The Farm Bureau insurance carrier in these states is now looking to expand their product offerings to include Agritourism liability policies. Check with your local Farm Bureau agent if you reside in these states to give you a quote.
Jane Eckert is owner of Eckert AgriMarketing, a full-service marketing firm that works with the travel industry and the agricultural community to promote agritourism. She can be reached at 314-862-6288 or by visiting www.eckertagrimarketing.com
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