What Industries or Operations Fall Within Large Commercial Farms?  

Commercial or large farms can encompass a wide range of farm industries. We’re going to discuss those operations and the insurance coverage that should be considered.  

• Dairies  
• Seed Sales  
• Agronomy Services  
• Custom Harvesting  
• Food Manufactures  
• Corporate Growers  
• Corporate Equine Facilities  
• Show Arenas & Events  
• Swine Confinement Operations  
• Cattle Confinement Operations  
• Custom Spraying Operations  
• Orchards  
• Vineyards 
• Commercial Farms  
• Family Farms and Ranches  
• Pelletized Agriculture Feed Manufacturers  
• Meat Processing Plants  
• Agriculture Hauling
• Seed Growers  
• Agri Tourism Facilities (large scale) 
• County & State Fairs  
• Agriculture Consultants  
• Large Scale Row Crop Operations 

What Coverages Should Large Farms Consider?  

Commercial Farm General Liability – Safeguards your business against claims related to bodily injury, property damage, product damage, and more. 

Product Liability– Liability coverage against products you manufacture. Coverage against things like defective products, recalls, injuries from using your products or even spoiled goods in some industries.  

Commercial Farm Auto – Most commercial farm operations rely on commercial vehicles of some sort, whether it be a fleet of light-duty pickups or semis used for hauling. These vehicles need a commercial auto policy if they are used for business.  

Commercial Farm Property – Provides coverage for commercial buildings, farm buildings, business personal property, tools, and equipment. 

Business Income Protection – Coverage against the loss of income due to a covered loss.  Reimbursement of payroll expenses, profits, and extra expenses generated due to a covered loss.  

Extra Expenses – Coverage against any expense that is over and above what you would typically be responsible for: additional moving expenses, expenses for renting specialized equipment, expenses to rent a new facility to reopen and continue operations, additional utility costs due to operating more facilities, additional cleaning expenses.  

Theft – Losses from crimes are typically not covered by property insurance and require specialized coverage. 

Workers Compensation – Covers medical expenses, lost wages, and rehabilitation costs if employees are injured or fall ill while working. 

Commercial Farm Umbrella – Additional layers of liability protection to sit on top of all underlying insurance policies. Protection against large exposures and claim potential.  

Commercial Farm Equipment (AKA Inland Marine) – Protects products or equipment stored off-site, mobile irrigation systems, finished goods, products in transit.  

Care Custody & Control – A coverage if you manage someone else’s property. It is common in contracted growing operations where you’re tasked with growing livestock for herd owners.   

Directors & Officers – Coverage to protect owners, board members, or executives in your operation against personal losses if they get sued for business decisions or actions while managing the company.  

Professional Liability – Liability protection against errors or omissions when giving professional advice to customers that ends up causing a loss of income or damage to a customer’s business.  

Pollution Liability – Coverage against items like spray drift, or contamination of pollutants into the soil or water table. Helps pay for the investigation, mitigation, and the cost to repair the damages.  

ERISA – Protection for the company if a 401k plan is offered. There is a federal requirement that any entity offering a retirement plan must legally carry an ERISA bond/insurance plan.  

Employment Practices Liability (EPLI) – Coverage that covers the employer against wrongful termination, age discrimination, sexual harassment, wage disputes, and other employment-related issues.  

Health Insurance – Group benefits plan that provides medical insurance for employees. Can include things like Dental, Vision, Short Term Disability, Long Term Disability, Life, Long Term Care. Any business with over 50 employees is legally required to offer a plan to its employees.  

What Insurance Coverage Differences are There Between Large Farms and Small Family-Owned Farms?  

There are some common differences we see from small farm insurance plans compared to large farm plans, although there are commonalities between the plans as well. Here are some of the differences we commonly see:  

• Limits of liability – We typically see much greater limits of coverage on large operations. There can be 10s of millions of assets that need covered.  A small family farm may only need to carry liability limits of $1mm. A large farm operation may need in excess of $15-20mm of coverage.  
• Employees – Typically small operations do not have employees, whereas large operations always do. Large operations likely need to purchase workers compensation insurance plans, as well as having employment practices liability, employers’ liability, and employee benefits insurance coverage in place.  
• Multi-State – Small operations are typically located in one state, while large operations can cover several locations across state borders.  Each state has different insurance laws which may require different coverage to be placed.  
• Schedule Sizes – Large farm operations always have larger fleets of vehicles, larger property coverage needs, and more assets to cover in general. While it is relatively the same coverage from small to large operations, the sheer size of large operations can create its own challenges with placement of coverages.  
• Professional Coverages – Large operations typically have executive or board members whereas small operations do not. Professional coverage like directors & officers’ coverage, fiduciary liability, and ERISA coverage may be needed for large organizations.  
• Carrier Limitations – Carriers often have reinsurance treaties (policies) in force that limit their overall appetite. The reinsurance companies place parameters on what limits of insurance can be offered to their customers. The larger the carrier, the larger these limits are as they have the financial means to back the plans. Some smaller mutual carriers have total insurance value limitations of $10mm, $15mm, or some enter the market at a $25mm cap. This can cause issues for larger operations and may limit the insurance providers you can work with.  
• Claims Expertise – Small farm losses can be more predictable because their operations are tried and true. The larger the operation, the more complex claims scenarios can be, and the payouts themselves can be much larger.  Having an insurance carrier with agriculture claims experience is important to keeping the operation running smoothly.  

Complex Industry – Choosing the Right Insurance Broker Matters.  

The insurance world is moving fast, and continues to face a lot of challenges. You need an agent who knows how to navigate it.  There continue to be strong economic challenges in the insurance industry caused by record inflation rates, weather pattern severity, and supply chain strain.  

Carrier representation is one of the main decisions to consider when choosing an insurance broker to help manage your commercial farm insurance risk. We only work with A-rated insurance companies, and we have a lineup of carriers specific to the agriculture industry. Companies like Westfield, Ohio Mutual Insurance Group, Travelers, Liberty Mutual, Cincinnati Insurance, Grange, Nationwide, The Hartford, among others are those who we typically work with, and they have specific coverage plans for commercial farm operations.  

Along with carrier representation, we have years of experience in the industry helping large farm operations find a risk plan that fits their needs.  We take the time to understand your operation, approach all our large commercial farm insurance markets, and find real world insurance solutions for your business while ultimately placing the plans and helping protect your legacy.  We have a unique service model: you get assigned a dedicated licensed account manager and licensed insurance agent to help manage your day-to-day requests. Typically, you get answers to questions, insurance certificates requests, and MVR checks back the same day you request them.  

We also represent you when a claim occurs and have no problem communicating with your assigned claims adjustors. We strive to get what is owed to you and make sure that it happens in a timely manner.  

At Hitchings Insurance, our dedicated professionals have over 55 years of experience helping businesses and farms find ideal coverage solutions. Contact us today to get started!