Smaller farm operations often face a mixed bag of risk exposures. Some are specific to homeowners, while other exposures are more common to businesses.
It has always been difficult for small farms to secure steady income from the profits of farming alone. Many also work full or part-time jobs to supplement their income, or operate other ventures that may or may not be tied directly to farming.
Farming-related side businesses
- Produce stand or gift shop
- Canning operations
- Creamery or butcher
- Small repair or welding shop
- Petting zoo or rides using the farm’s animals
- Pumpkin patch or corn maze during fall months
Non-farming side businesses
- Daycare or babysitting service
- Accounting service
- A pottery studio from a converted barn
Most of the time, additional coverage can be added to the farm policy to cover losses that may be connected to incidental business operations. Typically, a specific description and naming of the business will be required, such as “Smith Family Farms Creamery.” The farm owner can also be protected against liability and property loss that is used in the business.
As an example, Mike Smith owns a soybean farm with a small apple orchard. Farming operations revolve around soybeans, and come harvest season, they are sold to a nearby grain elevator. The family also processes apples from the orchard, which are pressed into cider and used in other products, such as applesauce and jams that are sold from an old service building on the property that has been converted into a storefront. Woodworking projects and other hand-made items are also for sale.
There could be no coverage for any damages resulting from this side business unless it is added to the policy. Here a few potential claims examples:
- A child becomes ill after drinking cider that was contaminated due to negligence.
- A customer slips on apple pressings in the parking lot and is hospitalized.
- An entire batch of applesauce is ruined because refrigeration equipment broke down.
- The store catches fire, destroying all contents. Faulty wiring is to blame.
If you own a farm and operate other businesses activities, be sure to discuss them with your agent.