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Nationwide - How Much Liability Insurance Do You Need?

Operating a farm presents daily risks to farmers, employees and visitors. Proper liability insurance is necessary to protect your assets and secure your business, home, and other investments. But how much is enough? Southern States® has partnered with Nationwide® Agribusiness Insurance to provide vital information on liability insurance and how it can effect your farm and your future.

For protection in an emergency, you not only need the right type of insurance, you need the right amount of insurance. To gauge how much liability insurance is enough, consider your risks or liabilities: business operations, risk exposures, cars, drivers and other business properties. Your premium costs depend on multiple factors, including the level of liability your business maintains, the size of your farm or agribusiness and types of activities performed. If you think about it, liability insurance for your farm or business is relatively inexpensive when you consider how one claim can be financially devastating to your business and its long-term stability.

Your premium is impacted by the number of claims an insurance company pays, so you can help reduce your liability costs by taking measures to avoid losses. This is known as risk management - the process of identifying and evaluating potential risks within the workplace and finding ways to prevent or reduce accidents and circumstances that cause production setbacks and financial loss. While it's not possible to prevent all risk, risk management can help manage the unexpected. Many insurance companies have specialized loss control representatives who can review your risk exposure and provide recommendations on how to increase safety.

When it comes to your farm and farming business, there are many items to consider when determining what liability insurance you need. Most farm policies provide basic liability coverage for use of farm machinery and equipment needed for both on and off the premises, but there may be other coverage required that is specific to your business activities. No worries – insurance can be customized to your individual needs. For example, many farms use ATV's or other recreational vehicles to gain access to different areas of the farm. Liability coverage is usually provided as long as the ATV is used on premises, but once it is taken off, there is often no coverage. If your ATV is required to be licensed for road use as part of doing business, you will probably need a separate motor vehicle policy.

Many farmers are looking for opportunities to supplement their agriculture income. In many cases, this leads to selling farm products and/or services directly to the public. Typically, a farm policy is designed to provide liability coverage primarily for wholesale activities. If direct marketing becomes a significant source of income, supplemental coverage may be necessary. Farm policies can often be endorsed to provide coverage for agritourism activities from farm stands and farmers' markets to on-site activities such as corn mazes, hay rides, or petting zoos. Custom farming, the practice of performing farming operations on an owner’s land in exchange for a fee, may also warrant additional coverage. Discuss the scope of your activities with your insurance agent who can ensure that all of your potential liabilities are covered.

Other coverage that you may need to consider outside the base farm policy include certain specialized farm practices. In an equine operation, you may need an add-on policy for boarding, breeding, and training of horses. Dairy farms may need additional coverage that offers protection in case of milk spoilage from contamination or leakage of milk tanks. There are even add-on policies that cover pollution damage. Discuss your activities with your insurance agent to ensure you have the right protection for your business.

Other options such as umbrella coverage may be less costly than higher limit liability policies. With an umbrella plan, you can extend your liability protection and cover gaps in your base insurance policy. This alternative may offer sufficient coverage at a greater savings. Talk with your agent about your current liability limits. It could mean the difference between losing your farm or protecting your assets for future generations.

Special Member Savings

At Southern States ®, we are proud to be a farmer-owned cooperative. Southern States has partnered with Nationwide ® to offer Southern States Cooperative member-producers in North Carolina and Virginia special discounts on farm insurance. In addition to giving you exclusive insurance savings, we're also joining forces to support the cooperative that means so much to you.

Nationwide® Agribusiness is the number 1 insurer of farms in the U.S. and a leading insurer of commercial agribusiness. Go to to find a local agent.

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