In
a number of situations farms really do not have the necessary coverage for
pollution exposures. Today’s volumes of pesticides and manure combined with
ever increasing environment regulations and/or sensitivity to these issues mean
that many farmers are not well protected in the event of a disaster. Insurance
companies are becoming more aware of the potential risks associated with the
farming operations and you the farmer should as well. In a loss situation,
damage caused by a pollutant on your property is not automatically covered.
What you need is “on-site pollutants” coverage to be added to the policy. If
you have a couple of mini-bulk tanks, you might have some considerable
environmental costs to worry about. It doesn’t take too many hours for a
hazardous materials cleanup team to cost a great amount of money to your
operation. In addition to the cost of cleanup, environmental monitoring and
environmental fines can really add up and if this damage spreads off of your
property and there is a fish-killing in nearby streams, there is a possibility
the person causing the damage would have to pay to restock the streams.
Pollution exclusions are common in farm policies. The intent of some basic farm
policies is to cover legal liability for “sudden and accidental” losses of
pollutants. With this coverage the insurance companies are not covering
pollution losses that affect your own property or losses that are caused by a
slow “leakage” type of situation.
The best way to avoid problems is to have a better understanding of the insurance you’ve bought.
Here
are some questions that farmers could ask their insurance broker:
* What is the extent of coverage for environmental cleanup?
* How much environmental cleanup coverage do I have?
* Am I covered for spills from off-the-farm transportation accidents?
* What is required of me if there is a chemical spill?
* Are there any actions I might take that might void my policy?
* Am I covered for chemical spills resulting from temporary storage accidents?
Some of this coverage is so specialized that even some insurance brokers aren’t aware of all of the ins and outs. You can’t buy a standard farm insurance policy that will cover you for all potential losses. Instead, farmers should buy a basic policy and then buy additional riders or a separate policy.
Then again there are some farm policies out there that do not cover any pollution losses, no matter what the situation. Scary… a limited amount of coverage is better then none at all. Depending on your situation, this “sudden & accidental” coverage can be had at no extra charge and can be very simple to have. Your Insurance Broker just needs to know the difference!
Today’s farmers should purchase insurance from people who know farming. Farming should be viewed as a business, and you should seek advice from people who understand your business.