Agritourism Ventures, Agritainment Activities and Liability Insurance Coverage

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Agritourism and Agritainment – What is it?

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 owns 2,200 acres decides to advertise guided hunting on his land for a per-gun or per-day fee. Many landowners in rural America have prime hunting habitat in the canyons and hills surrounding their fields, and allowing hunters to “pay to play” can be an added source of income for these farmers and ranchers. Other examples of agritourism activities include bed and breakfasts, a day on the farm, pumpkin patches, hayrack rides, horseback riding, cabin rentals, native trail walks, bird watching, vineyard tours and more.

Liability Insurance is Essential

In my experience with farm and agricultural-related insurance coverages, I have had the privilege of working with a premier agritourism marketing company. This company provides not only an online marketplace for agritourism and agritainment activities, but also analyzes the probability of success of a new venture and makes recommendations to help ensure a successful venture.

With all the planning and preparation that goes into starting an agritourism business, one of the most important pieces of the puzzle is the liability insurance coverage for these activities. Many people assume they will have coverage under their current farm or ranch policy. The problem with this assumption is that they probably have very limited if ANY liability insurance coverage with an unendorsed farm policy. Some companies do offer hunting and/or fishing endorsements to their policies, but these endorsements were not intended, nor do they provide any coverage, for the commercial agritourism business.

Your Current Coverage may not be Adequate

The standard farm/ranch insurance policy is intended to cover risks associated with normal “everyday” farming exposures. This includes things like driving your implement down the highway or protecting your new pivot system from toppling in the wind. Farm policies are not a replacement for commercial insurance coverage, and this is where the potential for a devastating loss occurs.

When the farmowner or ranchowner enters a commercial venture that is outside normal farming operations, the farm policy is not designed to cover the additional exposures. Specialized commercial coverage must be purchased that in many cases can only be secured in the excess and surplus (E&S) lines market since most admitted farm insurers do not provide the endorsements required to adequately provide coverage on the farm policy. The benefit of using a specialized carrier is the coverages may be specifically tailored for your specific activity and underwriters and loss control will be experienced and knowledgeable. The drawback is the higher cost of surplus lines coverage. There is generally a higher minimum premium associated with surplus lines policies as well as specialized taxes on surplus lines policies in some states.

Conclusion

Agritourism and agritainment activities are a great way to showcase the resources in many rural areas. Insurance coverage is a necessity to protect the assets of the landowner because as the saying goes, ‘A day in court can cost you a lifetime of work’. Coverage is available for many activities, but your local insurance agent may not be the best source of information concerning these specialized coverages. Don’t assume you have coverage and don’t let your local agent misinterpret policy endorsements. If you have questions about your current policy coverages, contact your insurance company directly and ask specific questions about your coverages.

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