The Difference Between Employers Liability and Public Liability for Farmers

Farmers are masters in the agricultural industry. Some farmers are generational and have been living the lifestyle from a very young age and have had involvement in farming in some way shape or form. But, when it comes to the insurance part of owning a farm, a lot of farmers get confused about the kind of coverage they need, the amount of coverage or level, and what is the difference between various types of insurance policies that are similar. A popular misconception among farmers is the distinction between employers liability insurance and public liability.

It’s integral for any business to understand what they are covered for, so they know they will have the right protection in the event of an insurable loss. The Hitchings Insurance team would be happy to discuss the differences between employers liability and public liability for farmers if you are still unsure after reading this article. Give us a call today or request a free farm insurance quote for your agricultural operations.

The difference between employers liability vs public liability insurance for farmers:

When it comes to employers liability and public liability, both types of coverage are designed to pay out in the event that a farmer should face a compensation claim for a loss or injury. The key difference to be noted here is that public liability insurance covers claims made by third parties, whereas the employers liability covers the farmer when an employee suffers a loss or an injury and makes a claim. Note that public liability is not generally legally required, but it is compulsory for all employers to hold some level of employer liability insurance. Anyone under the direction of the policyholder may be classed as an employee in this case.

Why is employers liability insurance mandatory but public liability insurance is not?

There is no federal law in the United States that mandates employers to carry liability insurance. However, many states will require employers to carry employers liability insurance, because it benefits employees who become ill or injured due to the nature of their job. This is to ensure that the workforce does not suffer because of injuries or illnesses suffered on the job and that workers will have the means to cover lost income or pay for medical bills until they can return to work.

Public liability insurance is not mandatory since it’s not for the employees themselves but rather for the general public. It is still highly required since a public liability case could cost your farm quite a bit, but ultimately, it’s not a state requirement the same way that employers liability insurance is.

Why purchase employers liability insurance for farmers?

For one, it’s mandatory for employers, as previously mentioned. For an employer, you must carry employers liability insurance to protect all your employees in case they fall ill due to their job or become injured.

Farming employers liability insurance can even come in clutch if you work with volunteers or have friends help on the farm. Technically, your employers liability could apply to anyone, not on your payroll but who helps occasionally with moving cattle or driving machinery. Farming is a risky business! Injuries could happen at any point, and even those volunteers or friends could become a liability if you didn’t have insurance. If those friends or volunteers are injured and can no longer work and may be faced with financial difficulties, they could come to you seeking compensation.

The costs arising from a claim can be huge, and not something any farmer wants to deal with. Employers liability insurance secures your workers and your finances.

Why purchase public liability insurance for farmers?

Farmers, just like any other business owners, can greatly benefit from the added protection that a public liability insurance policy provides. There are many reasons why a farmer might choose to purchase this policy, even if it isn’t technically required per state law.

For one, public liability insurance offers protection against third-party claims. It can protect farmers against the cost of potential lawsuits from visitors and customers who could suffer property damage or injury due to farming operations or activities. A visitor could be injured by a piece of equipment or even an animal, for which the farm owner could be held liable and need to pay for the damages. Public liability insurance for farmers may come in to cover these costs.

Sometimes, contracts with suppliers, vendors, and other business partners will require a farmer to carry public liability insurance as well, even if the state doesn’t mandate it. This insurance allows farmers to meet these requirements and avoid further legal issues with potential breaches of contracts.

And, finally, there’s peace of mind. Peace of mind is priceless for any occupation where there might be the risk of damages, injuries, or other matters which could cost the farmer financially. You can focus on your business operations without worrying about what could happen with farming public liability insurance.

Both may be necessary.

When it comes down to it, if you are a farmer that employs workers or has volunteers/friends come to help out, and you deal in some capacity with the public (i.e., visitors and customers) you may benefit from carrying both public liability insurance and employers liability insurance.

Having sufficient coverage is key to the longevity of your agricultural operations. Having both coverages may be necessary for some businesses depending on your specific operations. If you are unsure, then consult with a Hitchings Insurance professional to put your mind at ease. As many of our team members are farm-grown, we understand just the kind of “personal touch” you need to get yourself feeling secure and confident at your farm. We have your back if anything happens.