Those of you who may ask what exactly an agritourism or agritainment venture is, it is simply using existing resources such as farm land or other natural resources to increase the profitability of a farm or ranch operation. For example, the farmer who is the owner of 2, 200 acres decides to advertise guided hunting on his land for a per-gun or per-day charge. Many landowners in rural America have prime hunting habitat within the canyons and hills surrounding their fields, and allowing hunters to “pay to play” can be an added source of income for these farmers as well as ranchers. Other examples of agritourism activities include bed and breakfasts, a day on the actual farm, pumpkin patches, hayrack rides, horseback riding, cabin rentals, native trail walks, bird watching, vineyard tours and much more.
Liability Insurance is Essential
In my experience with farm and agricultural-related insurance policies, I have had the privilege of working with a premier agritourism marketing company. This company provides not just an online marketplace with regard to agritourism and agritainment activities, but also analyzes the probability of success of the new venture and makes recommendations to assist ensure a successful venture.
With all the preparing and preparation that adopts starting an agritourism business, one of the most significant pieces of the puzzle is the liability insurance coverage with regard to these activities. Many people assume they will have coverage under their own current farm or ranch policy. The problem with this assumption is that they probably have very limited if ANY liability insurance policy with an unendorsed farm policy. Some companies do provide hunting and/or fishing endorsements to their policies, but these endorsements weren’t intended, nor do they supply any coverage, for the commercial agritourism company.
Your Current Coverage might not be Adequate
The standard farm/ranch insurance policy is intended to cover risks related to normal “everyday” farming exposures. This includes things such as driving your implement lower the highway or protecting your pivot system from toppling in the wind. Farm policies are not a replacement for commercial insurance policy, and this is in which the potential for a devastating loss occurs.
When the farmowner or even ranchowner enters a commercial venture that’s outside normal farming operations, the farm policy isn’t designed to cover the extra exposures. Specialized commercial coverage must be purchased that in many cases can only be secured in the excess and surplus (E&S) outlines market since most admitted farm insurers do not provide the endorsements required to adequately provide coverage on the farm policy. The benefit of utilizing a specialized carrier is the coverages may be specifically tailored for your specific activity and underwriters and loss control is going to be experienced and knowledgeable. The drawback is the higher cost of surplus lines coverage. There is generally a higher minimum premium associated along with surplus lines policies as well as specialized taxes on surplus lines policies in certain states.
Conclusion
Agritourism and agritainment activities are a terrific way to showcase the resources in several rural areas. Insurance coverage is a necessity to protect the assets from the landowner because as the old saying goes, A day in court can cost you a lifetime of work’. Coverage is available for a lot of activities, but your local insurance agent might not be the best source associated with information concerning these specific coverages. Don’t assume you have coverage and don’t let your local agent misinterpret policy endorsements. If you have questions about your present policy coverages, contact your insurance company directly and get specific questions about your coverages.
