Ignorance is not Bliss: An Attorney's Take on Farmers Market Insurance

      Posted On: April 19, 2011

By Sara Zimmerman, Senior Staff Attorney, PHLP at Public Health Law & Policy and Farmers Market Insurance Task Force Member

As a staff attorney at Public Health Law & Policy, I get questions from people all over the country who are trying to make their communities healthier. Some folks are trying to get healthier food in corner stores, others want to make sure that communities support people getting exercise by walking or biking, and many people are working to establish full-fledged farmers markets or produce stands at schools and churches.

With all of the many different legal questions that people have, there is one concern that I hear over and over again, from people working in all different areas and focusing on all different food system issues.  That is the dreaded – but important – question, “But what about liability?  Can I get sued?”

People have the notion that we live in a highly litigious society, and that there is a high likelihood that someone may sue you for no good reason just to make a quick buck.  Fortunately, our research shows that this isn’t true.  But liability problems can arise, and so it’s good to be prepared.  And so generally, we recommend the following three steps.

First, relax.  Courts are quick to throw out frivolous cases, and most people who are injured due to someone else’s fault don’t sue (excluding car crashes and workers’ compensation plans that set up relatively clear-cut compensation scenarios).  Second, act responsibly.  If you act to protect against foreseeable hazards, then you can avoid most injuries – and if no one gets hurt in the first place, then there’s little chance of a lawsuit.  Moreover, even if someone does get hurt, by showing that you’ve acted responsibly and with reasonable care, you can show that you have not been negligent.  As a general matter, if you’re not negligent, you’re not liable, even if there is an injury.

And third, we always recommend that people make sure that their activities are covered by insurance. Insurance provides a crucial backup plan – because if you happen to be in that unusual situation where there is a lawsuit, and you are found negligent, then it won’t be much comfort that there was very little likelihood that this would happen. In addition, even if you win the lawsuit, it will still be expensive to defend.

But our recommendation that people make sure they have insurance has been a tricky one for many groups and individuals. While they appreciate the importance of insurance, they’ve had more questions than we’ve had answers: How do I know whether our policy covers a new activity we’re engaged in? Are volunteers usually covered? How much should I pay for insurance? How long does it take to get insurance in place?

Fortunately, the Farmers Market Coalition has come to the rescue! In a series of webinars organized by FMC and sponsored by the USDA Risk Management Agency, a variety of experts – academics, insurance representatives, and market managers – have collaborated to explain the ins and outs of farmers markets and insurance. The webinars, which are archived on the FMC website, provide an overview and general introduction to why insurance matters for farmers markets.  In addition to discussing insurance for markets, they also explore how to buy a policy, product and producer liability, minimizing risk, whether to require that your vendors have insurance, statewide insurance programs, and protecting board members.

The participation of representatives from the insurance industry provides an invaluable opportunity to better understand the insurer’s perspective in an educational atmosphere in which there’s not a specific policy on the table. The voices of farmers and market managers and coordinators keep the webinars grounded and yield a realistic conversation about how to wrestle with insurance issues.

What are some key takeaways from the webinars?

• Sometimes you get what you pay for: All insurance policies are not created equal, and often a policy is a lot cheaper because it provides considerably less protection. Some policies will provide adequate coverage, and others won’t. You need to discuss your needs with the insurance representative to be sure that you’re getting the right policy for you.
• Give yourself enough time to find and purchase an insurance policy: Start looking at least 45 days before you need insurance in place so that there is enough time to get a policy that provides the right fit. The best first place to check is with your state’s farmers market association, if there is one. A growing number of these associations offer policies for their members.
• Clearly explain to your agent or insurance representative how your market works – what products the vendors usually sell, average attendance, hours of operation, physical structures at your market (tents, fences), and who owns the property where the market is held. The more the agent understands your operations, the better advice you can receive. If there are any major changes in your market during the year, such as a change of location, make sure to tell your insurer.
• Ignorance is not bliss: Do not hope or assume that your insurance policy covers sufficiently all the types of activities you engage in. You need to know your policy limits, and how they may be affected by other claims. In addition, the type of coverage provided by insurance policies can vary significantly, and if you want to be certain that an activity is covered by the policy, you need to ask and confirm. For example, many market policies exclude dog bites and injuries. Others exclude temporary structures such as tents. Most policies exclude alcohol. You may want to inquire about adding in coverage for an excluded area, or you may want to adjust your market practices if you don’t have coverage. But even if you want to keep things the way they are, understanding what is covered is your starting place to making an informed decision.
• Keep records: Don’t be shy about asking questions, and if something is important to you, get the response in writing. Keep all your communications and insurance records in one place and don’t throw them away for at least three or four years, or more, after that year’s policy has expired. Claims and lawsuits can occur years after the injury occurred.
• The language of the policy is key: Know what your policy says. Even if your main policy provides broad coverage for all your needs, be sure to understand what is contained in any endorsements (often called riders) to the policy. An endorsement is an amendment to the policy, and if it excludes the key elements you wanted, the endorsement will control.
• Insurance policies protect you from the cost of defending yourself: You may feel confident that your market isn’t run negligently and that no one would find you negligent. But defending yourself in court can be very costly even if you do succeed. One of the significant benefits generally covered by insurance policies is the cost and hassle of defense. Remember to notify your insurer whenever someone makes a claim against the market or it members, even if you think the claim is frivolous.
• Be sure to manage your risk not only through insurance but also by taking reasonable steps to avoid injuries. Make sure that tables and booths are sturdy and won’t blow over in the wind. Beware tripping hazards, such as electrical wires, and slipping hazards, like fallen peels and rinds. Think about possible ways injuries could occur and take reasonable steps to prevent them.

At Public Health Law & Policy, we continue to see a lot of questions and confusion around insurance. We are working to help people understand how insurance can help them, without being too expensive or complex, and how insurance can overcome fears of liability. As an FMC member, we’re happy to work at their side to help local food organizations better understand these topics as they grow.

Sara Zimmerman is a senior staff attorney at Public Health Law and Policy (PHLP), working on the National Policy & Legal Analysis Network to Prevent Childhood Obesity (NPLAN).  Sara works on legal issues related to healthy land use and transportation policy.  PHLP’s team of attorneys, policy analysts, and urban planners works to build healthy communities nationwide by providing technical assistance, model policies, and trainings. Learn more about PHLP at www.phlpnet.org.