Whether you are a landlord or a tenant, it is really tempting to skimp on insurance for bare dirt. After all, what liability could there possibly be with just dirt? You might be surprised to know the extent of exposure you have, even without a structure on that piece of property.
Rod’s London Bridge
Our classic example at Compass comes from a client of Rod Steffen, from our Cissna, IL office. In this case, a farmer was simply driving across a bridge over a creek on our client’s property. The bridge collapsed, leading to damages and injuries for which the landowner/tenant was sued. Damages were significant and an adequate liability policy protected Rod’s client.
Even if you don’t have a structure, such as a bridge on your property, the risk is still substantial. Imagine that a tenant farmer has a kid walking beans or detasseling corn that steps in a hole and is injured because a tile is broken. Imagine that a combine malfunctions, causing an injury. Who is to blame in these scenarios? The tenant? The owner?
When something bad happens, EVERYONE gets sued!
For this reason it is critical that all parties have adequate liability insurance.
Premises and Operations
Farmland Insurance covers two distinct areas of liability, damages caused due to your Premises and those caused by Operations. The Premises component covers injuries caused by the condition of your land, as described in the above example of a kid being injured by stepping in a hole. The Operations coverage includes liability from injuries caused by machinery or farm animals, like the malfunctioning combine.
Especially landlords are often targets because of wealth, whether is it actual or just perceived. There is, therefore, a high risk of lawsuit that should be mitigated with an adequate umbrella policy. Read a recent article about Farm Umbrellas HERE.
Tenant farmers are also at risk due to the physical action of farming the land with workers and large equipment. What could go wrong? Lots of things…many of which you may not be able to control. If an employee is negligent and causes damages, that could also lead to lawsuits for the farmer. That’s why employee liability is an automatic part of our farm liability policies.
Whether you are a landlord or a tenant, many things could happen that would land you in court, at the business end of a nasty lawsuit. Make sure that you mitigate your risk by including adequate liability insurance as part of your plan to protect your assets and your time.