When leasing property for farming, both landowners

and tenants often worry about liability and

property damage. While they are prudent to have

this concern, both the landowner and tenant

Insurance is a useful tool to address other concerns

in addition to liability. Typically, one or more types of

insurance coverage is carried by both the landowner

and the tenant farmer. This guide will cover various

types of insurance recommended for consideration

by landowners and their tenants.

While a certain amount of risk is inherent in owning

property and in farming it, both parties can—and

should—take steps to mitigate risk. Parties should

assess risks, identify strategies to mitigate them and

designed parking area and taking steps to keep

wandering children from getting hurt by livestock

or equipment. Landowners who have electrical

wiring inspected or who x a structural problem in

a barn used by the tenant are also demonstrating

reasonable care. Negligence is dened as the

failure to exercise the reasonable care that a

reasonably prudent person would exercise in a given

circumstance.

General risk mitigation approaches include

toward avoiding and limiting adverse occurrences.

Transferring risk is mainly done through the use of

insurance.

This guide discusses several types of insurance

relevant to farm lease arrangements. The

requirements for—and interests of—both

landowners and farmers are discussed. Farmers may

need additional types of insurance coverage not

addressed here for their own business purposes,

such as product liability and crop insurance.

the landowner to obtain liability protection is to

require the tenant farmer to carry his or her own

farm liability insurance, naming the landowner as

an “additional insured.” The landowner should require

proof of such coverage, usually via a Certicate of

Insurance from the tenant’s farm insurance agent

specifying the location and description of the

insured property. If there are multiple properties

involved, each of these should be named in the

policy. This should be a requirement in any farm

By naming the landowner

on the tenant farmer’s

liability insurance policy,

the farmer is essentially sharing his or her insurance

with the property owner. In addition, when the

landowner is named as an additional insured on the

farmer’s insurance, the landowner will be notied

time of this publication, a common level required

is a minimum of $1,000,000 per occurrence and

$2,000,000 aggregate coverage.

It is acceptable for the property owners to ask

for a copy of the actual farm liability policy. Both

landowners and farmer tenants should make sure

that they understand what is covered and not

covered. The denition of farming for insurance

purposes is generally limited to the raising of crops

and farm animals. When relevant, it is important

activities will take place on the leased property,

and are not covered by farm liability policy, then

the farmer should be required to obtain additional

coverage for them. In some cases, the farmer can

purchase additional farm business coverage as a

part of their farm liability policy to address this issue.

In other cases, the farmer may need to purchase a

separate commercial liability policy that covers these

specic activities. With a commercial liability policy,

the tenant farmer should also name the property

her standard homeowner policy. However, some

insurance agents feel that in certain circumstances

it is important that property owners also maintain

their own separate farm liability coverage in addition

Both parties maintaining this coverage provides for

broader coverage, and increases the dollar amount

of the coverage available in the event of a claim since

the parties are not sharing one limit for coverage.

There are generally three ways landowners can

obtain this coverage:

1. In some cases, it

may be possible to

add an “incidental

farm and animal

liability endorsement”

to the landowner’s

standard homeowner

damages to farm property. The tenant must also

name the property owner as an additional insured

on that policy, which will cover damages only if

the farmer is found to be negligent and, therefore,

legally responsible for a re or other damages to the

property. In the event of property loss due to other

owner policies premiums vary. In some cases, they

are actually less

cost than some

homeowner

policies.

However, in

other cases,

farm owner

policies may be

as much as 30

this additional cost into the lease fee paid by the

farmer. Most general insurance carriers stay away

from farm owner insurance policies. However, there

are a number of insurance companies in the region

that specialize in farming and agriculture. A list of

those companies can be found at the end of this

document.

The second option requires the farmer to include

property loss insurance on his or her farm policy and

to name the property owner as an additional insured

liability insurance in case of re damage to farm

property because the farmer would be providing

insurance through their farm policy.

The latter of these options is the least expensive

approach. However, there are reasons why a

property owner would choose the rst approach,

such as if he or she also decides to become involved

in commercial farming activities. Ultimately these

options should be discussed with an insurance

professional within the context of the particular lease

to decide which option will be best for that situation.

are covered, and under what circumstance coverage

would apply. For instance, not all policies will cover

wind damage under all circumstance, and most do

not cover ooding. Whether property loss is covered

by the insurance of the tenant or of the property

owner, the property owner should make sure that

they are aware of what “peril groups” are covered

and that the insurance adequately protects their

is essential to the farming operation and in what

If the farmer will carry the property loss insurance

specically on the farm buildings to ensure that it

is adequate. For instance, the replacement cost of

an antique barn may be substantially dierent from

the cost of rebuilding a barn that would serve the

same utility purpose. It will be important to consult

with insurance professionals to determine the most

Maine Bureau of Insurance (https://www.maine.gov/

pfr/insurance/consumer/consumer_guides/pdf/

and a contractor. If there is an accident on the

farm involving a farm employee and he or she

takes legal action for compensation against the

farmer, the farm liability policy will not cover the

farmer if he or she has not provided for workers’

compensation insurance to the level required by

state law. Therefore, many farm leases will include

a requirement that the farmer carry workers’

compensation “at least to the minimum limits

imposed” by the state where the farm is located

There is a substantial advantage to both the property

owner and the farmer having the same insurance

addressed by either one party or the other. In theory,

this makes it less likely that some coverage issues will

be missed.

The following insurance carriers specialize in agriculture and farm

insurance in our region. Each company has a website with a “nd

an agent” tab to direct you to an insurance agent in your area. In no

particular order, these 6 insurance carriers are: