Insurance Issues: Chemical Drift a Risk on the Farm
Friday, March 8th, 2013
Andy Pate is an agent for Fleming and Riles, a 115-year-oldvindependent insurance agency in Albany, Georgia. The agency works with a variety of companies to get clients the coverage they need, including farmers in the agricultural region of Southwest Georgia. In a short series, Growing America (with Pate’s help) will highlight insurance issues producers should consider and liability risks they can avoid.
This week, we talk about the risk of chemical drift and how to protect yourself. General liability insurance can protect a farm for up to $1 million, but that usually doesn’t include environmental impacts like chemical drift.
“A typical general liability policy has what’s called a total pollution exclusion, and that’s going to cut out any coverage for chemical drift,” Pate said.
Most farmers don’t consider their activities pollution, but pollution might be anything that is used in normal farming operations brought onto the farm that someone else says harmed them or their property.
So, a drifting cloud of 2, 4-D might be pollution to a neighbor who suffers decreased yield. A cloud of smoke created by burning debris might cause a car crash and be classified as a pollutant.
“All it takes for a pollution claim is for someone to say they were harmed or damaged in any way,” Pate said. “That’s a liability claim, but is excluded from liability coverage if it is caused by pollution.”
Lots of farmers don’t realize they aren’t covered.
“It happens more than you would think,” he said. “You wouldn’t necessarily know about this unless you had experience with it or your agent pointed it out.”
A drifting cloud of 2,4-D can cost big time if a neighbor can show that his yield decreased by $20,000 to $30,000, for example. And most farmers have reliable records of the yield their fields usually produce, making it easier to prove damage.
The solution is to add a chemical drift rider to the liability policy. For around $600, a large farm could get $500,000 in coverage, a fairly reasonable expense to offset the risk.
“It’s important to know about because we all have neighbors,” Pate said.