Farm Liability Insurance Study Guide

Fast Facts

• Farm liability insurance can be a stand-alone policy or combined with farm property insurance to form a package policy.
• Combines homeowners and commercial property/liability coverages due to farms' residential and commercial characteristics.
• Three basic coverages in the Farm Liability Coverage Form (FL 00 20):
  • Coverage H: Bodily Injury and Property Damage
  • Coverage I: Personal and Advertising Injury Liability
  • Coverage J: Medical Payments

Farm Liability Coverage Form (FL 00 20)

Provides coverage for claims arising from insured locations, farming operations, products, and personal activities on an occurrence basis.

Coverage H: Bodily Injury and Property Damage

Pays damages the insured is legally obligated to pay for bodily injury or property damage to another party, if caused by a covered occurrence during the policy period.

• Bodily Injury: Includes bodily injury, sickness, disease, or death.
• Property Damage: Physical damage to tangible property or loss of use of property not physically damaged.
• Occurrence: An accident (sudden or repeated exposure to harmful conditions, e.g., faulty pesticide spraying harming livestock).

Duty to Defend: Insurer defends the insured against suits, even if groundless, false, or fraudulent, until policy limits are exhausted.

Key Exclusions

• Expected or Intended Injury: No coverage if injury/damage was intended (except reasonable force to protect persons/property).
• Contractual Liability: No coverage for damages assumed in a contract (can be added by endorsement).
• Pollution: No coverage for pollutant discharge (some exceptions).
• Aircraft, Motor Vehicles, Watercraft: No coverage for losses from these, with exceptions for smaller watercraft.
• Business Pursuits: No coverage for non-farming business activities.
• Custom Farming: No coverage for farming operations on non-insured locations (can be added by endorsement).

Coverage I: Personal and Advertising Injury Liability

Covers harm from specific offenses committed during the policy period, arising from personal activities or farming operations.

• Personal Injury: False arrest, malicious prosecution, wrongful eviction.
• Advertising Injury: Libel, slander, privacy violation, or copyright/slogan infringement in advertisements.

Coverage J: Medical Payments

Pays reasonable medical expenses incurred within three years of an accident causing bodily injury, even without a lawsuit. Known as “goodwill coverage” to avoid litigation.

Limits of Insurance

• Per Occurrence Limit: Maximum paid for a single occurrence.
• Aggregate Limit: Total paid for all damages under Coverages H, I, and J.

Definitions

• Farming: Operation of an agricultural or aquacultural enterprise, including roadside stands for farm products.
• Occurrence: Sudden accident or repeated exposure to harmful conditions.

Key Takeaways

• Farm liability combines homeowners and commercial coverages.
• FL 00 20 provides Coverage H (bodily injury/property damage), Coverage I (personal/advertising injury), and Coverage J (medical payments).
• Coverage is occurrence-based, except for personal/advertising injury (offense-based).
• Exclusions limit coverage for non-farming activities, pollution, and intentional acts.
• Medical payments cover expenses within three years to prevent lawsuits.