Required or Not, Work Comp is a Smart Move on the Farm | Compass Insurance Partners Skip to main content

Required or Not, Work Comp is a Smart Move on the Farm

Anyone who has ever worked on a farm knows that it is hard, and often hazardous, work. Injuries happen and that takes a toll on the productivity of the operation.


Despite this inherent risk, Illinois “Agricultural Enterprises” that employ fewer than 400 working days of agricultural labor per quarter during the preceding calendar year have an exception to workers’ compensation statutes that require benefits for employees injured on the job. In other words, if you have around 4-5 full-time employees, working 6 days per week you could be over the 400 working days per quarter and you would be required to have Workers’ Compensation insurance.


Workers’ Compensation coverage helps workers that are injured on the job pay for their medical care.

If your farming operation does not exceed that 400 days limit, you have a couple of options to responsibly deal with injuries to your farm employees.


1. Purchase Worker’s Compensation Coverage. Even though you are not required by law to extend this coverage to your employees when you don’t reach the 400 days limit described above, you might find that it is worth the extra expense. Work Comp doesn’t require negligence to be found in order for coverage to be extended. In other words, even injuries that come out of “no fault” scenarios would still be covered. It also doesn’t have a maximum limit, meaning that all needs would be met through this policy. Addressing medical needs quickly and thoroughly not only improves productivity…after all, the faster a worker gets back to work, the better for everyone…but it also makes lawsuits significantly less likely.

Another reason that it might be wise to purchase this policy even if you aren’t required is that it gives you the flexibility to expand into other revenue streams or just grow your farming enterprise without concern of inadvertently being in violation of the law. For example, if a worker is injured doing something that isn’t defined as “agricultural labor” the employer could be fined up to $500 for every day of noncompliance, with a minimum fine of $10,000. The employee may also sue the employer in civil court with potentially unlimited benefits. Read more about Illinois’ Workers’ Compensation laws here.

As an owner, even of a smaller farming operation, it might make sense to have a Workers’ Compensation policy on yourself. If your health insurance policy doesn’t cover work-related injuries, you may have a gap in coverage on yourself and that would be a HUGE problem if you were injured on the job. It’s a good idea to get all your policies through one agent so a professional can make sure to fill the gaps between any policies.


2. Add “Liability to Farm Employees” Coverage. If your operation is small enough that you are not required to purchase Workers’ Compensation, here is a less expensive option. This farm liability coverage requires proof of the farm enterprise’s negligence. Therefore, the employee must prove that you are at fault for the injury. A downside of this coverage is that it sets up a contentious situation that naturally pits employee against owner. It also carries it’s own extra risks. For this coverage to be engaged, the courts would have to determine that your farm was negligent and then the courts would award a settlement, that could very well be in excess of your liability limits. In that case, any part of the settlement above and beyond your limit would come directly from your assets. This could put your operation at great risk.

There are many different ways to take good care of your employees. Making sure that they are covered in case of work-related ​injury is not only a SMART thing to do, but it’s also the RIGHT thing to do!