Understanding farm liability coverage

Understanding farm liability

Life is full of uncertainties. An accident, serious injury, or a claim of negligence can send an otherwise smoothly running farm operation reeling, so eliminate some of the uncertainty by educating yourself on the liability risks that could affect your farm. Next step: Choose the right insurance.

Grinnell Mutual’s Farm-Guard® liability policy helps protect your farm from those unexpected accidents and intimidating liability claims. And when a catastrophe is too big to be covered under a Farm-Guard liability policy, a Farm Umbrella policy adds a layer of armor.

Your local member agent is your best farm insurance resource. But it doesn’t hurt to know enough to ask the right questions when you meet with an agent to review or buy a policy.

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Basic insurance terms

Here are some basic terms that can help you communicate when you need to talk insurance.

Here are some basic insurance terms that can help you communicate when you need to talk insurance.

  1. Policy: The written contract stating the conditions of your insurance coverage.
  2. Agent: The person who sells and services insurance policies.
  3. Adjuster: A person who investigates claims and recommends settlement options based on estimates of damage and insurance policies held.
  4. Claim: A demand made by the insured, or the insured's beneficiary, for payment of the benefits as provided by the policy.
  5. Indemnity: Restoration to the victim by payment, repair, or replacement.
  6. Coverage: The scope of protection provided under an insurance policy. In property insurance, coverage lists insured perils (the cause of a loss, e.g. fire), properties covered, locations covered, individuals insured, and the limits of indemnity.
  7. Coinsurance: Property insurance requires policyholders to carry coinsurance — insurance equal to a specified percentage of the value of property — in order to be eligible for full payment on a loss.
  8. Actual cash value: Cost of replacing damaged or destroyed property with comparable new property, minus depreciation and obsolescence. For example, a 10-year-old sofa will not be replaced at current full value because of a decade of depreciation.
  9. Qualifying event: An occurrence that triggers an insured’s protection.
  10. Deductible: Amount of loss that the insured pays before the insurance kicks in.

Farm-Guard® farm insurance guards what?

Grinnell Mutual offers Farm-Guard®, a farm liability policy that helps protect the members of your household in case of accidents, injuries, or claims of negligence.

Even better? Farm-Guard can be attached to your Farm-Mate policy issued by your mutual member or on its own. It’s the stuff you need coverage for but don’t want to think about.

  • Medical payments to public— Pays for covered accidental injury to the public on your premises, because of your farming operations, livestock, or personal acts
  • Employers’ liability — If state law doesn’t require workers’ compensation insurance, this coverage protects against liability for injuries suffered by your farm employees
  • Medical payments to farm employees— Covers certain medical expenses for accidental injury suffered by your farm employees while on the job, even if you’re not at fault

Automatic coverages

  • Losses arising out of custom farming or feeding when receipts total less than $5,000*
  • Protection from losses arising from business pursuits, except agricultural spraying, when receipts total less than $2,000*
  • Contractual liability relating to the farming operations, goods or products, or resident premises
  • Personal injury protection against bodily harm, shock, or mental anguish
  • Pollution (certain sub-limits may apply)
  • Limited coverage for bodily injury caused by communicable disease via animals

* Higher limits are available

Optional coverages include:

  • Business activities
  • Residential rental property
  • Home day-care provider
  • Hunting and fishing
  • Custom farming
  • Custom feeding
  • Broad contractual liability
  • Agricultural custom spraying

Talk to your agent for the complete list of the optional coverages you can add to your Farm-Guard policy with Farm-Guard Plus and Premier.

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When it rains, it pours: Farm Umbrella

When you’re up before the dawn and don’t stop working until after dark, the last thing you want to think about is getting slapped with a lawsuit. Unfortunately, life has a knack for throwing curveballs. Grinnell Mutual’s Umbrella coverage can help you deal with costly farm liability claims. It’s a simple, low-cost way to help protect yourself and your family from life-altering events.


  • Operate farm machinery on public roads
  • Own livestock
  • Have a dog or swimming pool
  • Own watercraft or off-road vehicles
  • Own rental or vacation property
  • Participate in volunteer activities


With this policy, you will have an additional limit of liability protection of $1 million or more — and limits up to $15 million are available. A Farm Umbrella policy builds on protection you already have, giving you an extra limit over and above other policies.

Here’s an example. If you have $300,000 of liability coverage provided by your Farm-Guard® policy and you purchase a Farm Umbrella policy with a $1 million limit, you could have up to $1.3 million available in potential coverage from a covered cause of loss.

Plus, we offer other products for even more protection.

Optional coverages

  • Uninsured Motorists*
  • Underinsured Motorists*
  • Uninsured Watercraft*
  • Underinsured Watercraft*
  • Additional Insured
  • Business Activities

* Not available in Missouri or Oklahoma

Additional coverage options are available for

  • Custom feeding
  • Confined animals
  • Non-owned livestock
  • Need for contractual coverage
  • Physical damage to property of others


The insurance coverages defined on this page are just part of the included and enhanced coverages you can add to your farm policy with Grinnell Mutual or a mutual member to protect every aspect of your farm’s liability exposures. Don’t forget about protecting your farm property with a Farm-Mate policy issued by your mutual member.

So even if the plans you have for your farm operation aren’t the same as what the future holds, we’ll keep our promise to protect your interests. Trust in Tomorrow.™ Contact your agent today.

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