If you’re like most farmers, your farm insurance may not be top of mind as you run your business. But it’s extremely important if something were to happen – if you needed it to help protect you and your farm.

The details of farm personal property and liability insurance can be tough to wade through. Sometimes even details that may not seem important can become extremely critical. It’s important to know that your agent or advisor is competent in managing those details. You need to feel comfortable trusting them.

Not protected

One operation found out that their farm insurance wasn’t protecting them the way they thought it would. An employee was driving a sprayer to a field and ended up causing a bad accident when he hit a pickup truck at an intersection. It was determined that the accident was the fault of the farm employee.

That would have been tough enough, but the situation became even more devastating because of the way the farm’s insurance had been set up. The sprayer the employee was driving wasn’t listed on the farm’s business insurance policy. The farm couple discovered that somehow the sprayer had been insured under the wife’s name only. However, her name wasn’t on the business insurance policy.

Since the accident was found to be the employee’s fault, the farm business was considered responsible. But since the sprayer wasn’t on the business’ insurance, the farm couple ended up being personally liable to pay for the damages that happened in the accident, as well as having to pay to repair their sprayer.

Ask questions

As any farm couple can imagine, this situation certainly wasn’t anything the couple was planning or preparing for. They thought they would be protected by their farm insurance, but because the farm equipment wasn’t insured properly, they weren’t. In this case, they were even personally exposed.

As margins on the farm become tighter, many operations would struggle after a major loss like this. Your farm’s insurance helps protect against these situations, but everything has to be set up correctly – and maintained correctly – to protect you the way it should. You need to be able to trust your agent or advisor to get it right.

If something unexpected were to happen, do you know whether you’d be personally liable? Here are a few questions to ask yourself this winter:

- How is everything titled or owned on my farm? (equipment, buildings, etc)

- Is that properly reflected in my farm’s insurance policies?

- What has changed on my farm lately? (new business entities, new purchases)

- Does my insurance agent or advisor call or meet with me regularly to find out what’s changed on my farm? Do they update my policy accordingly?

- What are some of the top areas that we’ve found typically need to be checked and updated – to keep the farm’s insurance up to date? Get a checklist in the Smart Series publication.