Liability Insurance for the Farm Business

Abstract

As with any business, the farm business is subject to certain potential liability claims by other persons -- whether these persons are visitors, guests, trespassers or employees. It is inevitable that some form of liability insurance must be purchased to protect the farm business assets and earning capacity from these potential liability claims, This publication covers farm liability; the various types of policies, their characteristics and applications, the characteristics of employers' liability coverage, workmen 1 s compensation, and the farm li ability insurance programs on 113 New York Dairy farms. These 113 farms are members of a select group of farms called the farm credit panel. The farm operators on this panel cooperate with the Department of Agricultural Economics at Cornell University on studies concerned with important topics in farm finance and farm management. The original farm credit panel included 128 dairy farms and were selected by means of a stratified random sampling technique, each strata being one of six herd size categories. Because of this selection process, these farms have an average herd size of 101 cows, compared to a statewide average of approximately 52 cows. The study, then, involves dairy farms that range in size from just over 25 cows to over 150 cows. The location of these farms is shown by region of the state in Figure 1. Insurance data for these farms were collected by personal interview. Financial and business data were accessed through confidential business summary records available only to specified department researchers.