By: Joshua Smart

The explosion of local farmer’s markets and online food sales has given the average farmer more access to consumers than ever before. 

While this provides farmers with an additional revenue stream and brings healthy, whole foods within consumers’ reach, engaging in these activities opens farmers up to significant risk – whether knowingly or not.  

A farm liability policy ends at the roadside stand. You may be operating without liability coverage when you sell pies and walnut butters, processed meats and poultry and cheese. Even offering processing advice, or selling customized tools or equipment beyond your property lines, could put your farm or ranch at risk. 

Consider the following true story: One Midwest farmer built a conveyor system he used successfully for years. He sold the system to another farmer. Soon after the second farmer put the system into operation, he experienced a severe bodily injury while using it. The farmer who built the conveyor system was liable for damages. 

As a rule of thumb, a farm liability policy is sufficient if you only engage in first-level agriculture processing without changing the original product. When engaging in activities beyond selling home-grown produce, you’ll want to consider a CGL policy to cover your risk. 

A CGL policy is necessary if you: 

  • Engage in secondary processing, wholesaling and/or distribution. 
  • Have retail operations beyond your road stand, including farmer markets.
  • Process your products off-site at another location beyond your farm.
  • Process your products off-site but the product returns to your farm for sale.
  • Processing goes beyond just sorting and washing.
  • Grow, sort and package for retail as well as label and send to end users for consumption. 

Should you find yourself in need of CGL coverage, don’t cancel your farm liability insurance. You’ll need both policies since a CGL policy contains exclusions for typical farm operations covered under your farmer’s liability policy. Similarly, the farm liability policy covers a farmer’s personal risks as well.  

Contact your HUB agribusiness specialist to help you secure complete coverage for all of your business activities.