Will Farm Insurance Cover Products That I Sell To Third-parties?

Caeva O'Callaghan | July 15th, 2021


Does farm insurance cover product liability?

Yes. Your farm insurance will cover products you sell from your farm, as long as we advise your insurance company.

When you get farm insurance that includes your products, you’ll be covered in case a member of the public or one of your customers falls sick or is injured due to one of the products you sell.

In this article, we’ll cover the following questions:

● What is product insurance for farms?

● When do I need product insurance on my farm?

● How do I get product insurance?

It’s important for public health and the success of your farm that you take out adequate insurance if you sell products to third parties.

What is product insurance for farms?

Anything that involves food production beyond common raw, unprocessed farm commodities is likely to need additional cover when it comes to insurance. If you sell milk, produce, baked goods or anything else produced on your farm, you’ll need product insurance.

This type of cover protects you in the event someone gets sick after using or consuming something that you’ve made. For example, if you are a dairy farmer, you will need to cover the milk your cows produce. In this specific case, it’s not out of the realm of reason that some antibiotics could pass through the cow into the milk, making someone who drinks it and is sensitive to those antibiotics extremely ill.

While your standard farm policy should provide some basic product liability protection, this coverage only applies to produce that you grow on your property and sell on in an unprocessed condition. For instance, if you’re selling apples to the public that you grew in your orchard, your general farm insurance policy would provide product liability coverage if your produce somehow causes injury or illness. On the other hand, if you use those apples to make cider, apple cake or some other processed product, you will need to add commercial liability coverage to your farm policy.

When do I need product insurance on my farm?

If your farm produces anything to sell whatsoever, you will need product insurance. But the type and extent of cover will vary depending on what you make. You may already have coverage.

Farms can generate basic commodities such as milk and produce, but the more processing involved in your products, the more important it is that you inform your insurance provider of what’s going on. If you make cheese for example, or if you’re baking on site, it’s important to know the regulations, requirements, and any licences or permissions needed and to be able to demonstrate that you have complied with requirements.

Being able to show this will help in defending any claims made against you, which, in the case of illness or death due to food poisoning or worse, can be very costly. The value of products in stock will also need to be covered and kept under review as a business grows.

How do I get product insurance?

Firstly, check your existing policy. You may already have product cover. It’s unlikely that you do, unless you’ve specifically asked for it in the past, but it’s important to make sure you aren’t overinsured.

If you need product insurance, give us a call today. We can negotiate this additional cover with your existing provider, or find you a competitive quote elsewhere. We will need to ask you details about the kind of products you make – whether it’s a few eggs from your chickens, bread and cakes, vegetables, or more.

Once you advise us of your requirements and we have the section in place, your policy will be extended to cover these products that you sell to the public.

Never sell products for consumption directly to the public without insurance. In the event that someone gets sick, you could be taken to court. The law takes public health very seriously – and if your farm is seen to be a danger to the public, you could face massive fines, jail time, or lose your farm altogether.

Confused about what level of product insurance you require? Our experts are on hand to help. Give us a call today.

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YOUR LOCAL FARM INSURANCE SPECIALISTS

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CAROLINE MCARDLE

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LINDA WEST

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All Information in this post is accurate as of the date of publishing.