If you own a farm, you probably know about many of the risks that come with running this type of business. But did you know that standard farm insurance policies don't cover losses arising from contamination or pollution?
While crop overspray of herbicides is covered under typical farm policies, pollution exclusions leave you unprotected against environmental contamination claims. Increasing litigation means all farmers should consider pollution coverage.
Specialized environmental insurance products are designed to fill coverage gaps in property and liability insurance policies. They can be tailored to your needs. These policies can cover pollution-related property damage, site cleanup costs, bodily injury and legal expenses.
Common pollution exposures
Chemical and fuel spills, runoff into waterways, dust, and other pollution incidents are common on farms. These can be caused by human error, equipment malfunctions or natural events like floods and tornadoes.
Unfortunately, it’s not possible to avoid all environmental loss exposures associated with farming. It’s important to consider insurance coverage for these common risks:
- Groundwater and surface water contamination
- Release of noxious odors
- Damage to natural resources
- Public nuisance claims
- Transportation risks (e.g., manure handling)
- Operation of manure digesters
- Community injury from exposure to foodborne bacteria
- Fertilizer spills and releases
- Improper storage of pesticides and herbicides
- Reduction of neighboring property values
Increased liability concerns
Farms are dealing with increasingly stringent environmental regulations at the state and federal levels. And they are frequently targeted by activists.
For example, environmental protection groups in Yakima, Washington, sued three dairy farms over contamination of local wells. The federal lawsuit alleged that the manure being applied to fields should be regulated as solid waste rather than as a fertilizer.
In a court settlement, the farms were ordered to provide bottled water to over 24,000 residents for at least two years or until nitrate levels in the groundwater returned to safe levels. In addition, the farms were responsible for all costs associated with the cleanup and monitoring of manure storage structures and compost areas going forward.
Mitigate risk
Many farming activities can harm the environment. To mitigate your risks against a catastrophic incident or lawsuit, consider purchasing pollution insurance. Your standard farming insurance policy likely won’t protect you, especially for cleanup costs.
Call us. We can help you evaluate and protect against your farm’s various exposures.