Insurance
Directors' and Officers' (D&O) Insurance Policy
With growth in the number and popularity of farmers markets comes increased exposure to risk, and not only the risk of tripping and falling, or getting sick from a producer’s products. Allegations from vendors of unfair management (such as discrimination, insufficient or biased farm inspections), or allegations from customers about false advertising or perceived price-fixing, can be extremely costly for a market organization whether or not they are found to have legitimate standing in a court of law. These are just a few of the numerous allegations a nonprofit farmers market board could be at risk to defend.
Recognizing the potential risks faced by both farmers markets and farmers market associations, the Farmers Market Coalition announces a new service for its members: Directors’ and Officers’ (D & O) Insurance designed specifically for farmers market organizations that are members of FMC. While many D & O policies are written for large non-profits, the FMC Member-Only Directors’ & Officers’ Policy was designed for farmers market organizations, large and small, including those with gross annual revenue under $50,000. The Campbell Risk Management website features answers to frequently asked questions about D & O Insurance and more specific information about how such coverage can protect farmers market organizations as they grow. The FMC member-only D&O premium cost are based on gross revenues and desired limits. Insurance premiums start as low as $402 per year.
This announcement builds on work which began this spring, when FMC leveraged its national scope to negotiate a $1 million Farmers Market Vendor Product & General Liability Policy available for a low flat rate, a valuable affordable service for beginning and limited resource farmers market producers. Producers can add as additional insured an unlimited number of farmers markets at which they sell, for no additional fee. While traditional farmers typically opt to add product and general liability to farm or homeowners insurance policies, many beginning, urban, or value-added producers who are not farm landowners do not have this option, and need a stand-alone policy. Growing for Market recently covered this newly available policy in an October article, quoting Campbell Risk Management Broker Larry Spilker: “Vendors have been frustrated at trying to find insurance because it’s either cost prohibitive or the people they’re talking to don’t understand the risk, don’t understand what it is they do at farmers markets. So having a national program where people understand what’s going on… It’s been a blessing to a lot of smaller producers out there who don’t know where to turn.”
On October 1st, the Farmers Market Coalition was awarded a cooperative agreement with the USDA Risk Management Agency’s Risk Management Education Program for ‘Reducing Risk in the Farmers Market System: Comprehensive Insurance Education and Research of Health Insurance Needs and Characteristics.’ As part of this project, FMC will develop and implement product and general liability insurance education and outreach materials including webinars, tip sheets for producers, farmers market managers, organization leaders, and educators. Targeted additions will be made to the Resource Library on insurance-related topics, and printed copies of farmers market-related insurance FAQs and coverage scenarios will be available to statewide farmers market organizations for dissemination market manager and producer trainings.
In addition, the project will allow FMC to conduct national-level analysis of health insurance demand, demographics, and priority health benefit needs among farmers market producers and farmers market managers. According to the Rural Health Association, rural residents are less likely to have employer-provided health care coverage or prescription drug coverage, and that rural individuals and families devote more of their income to health care costs (Rural Health Association, 2010). This leaves rural families, and farmers in particular, more likely to be underinsured or uninsured. One of the main reasons for the inadequate coverage is the fact that many family farmers and ranchers have to buy individual health insurance policies (Center for Rural Affairs, 2009). While only eight percent of the general population has individual policies, about one-third of family farmers and ranchers rely on individual policies, which generally provide less comprehensive coverage with higher deductibles and co-pays. In a preliminary survey conducted this spring, FMC found that 62% of responding farmers market producers, and 32% of market managers, purchase their own health insurance policies rather than use any sort of employee-sponsored plan.
To launch this project, FMC is seeking members with a specific interest or experience in insurance to serve on an Insurance Task Force. The task force will meet periodically throughout the fall and winter via conference call to guide project implementation and identify useful resources. Cheryl DeBerry, former chair of the FMC Education Committee, expressed gratefulness for Risk Management Agency’s support in for the project, saying that she is “excited to give our members the opportunity to become engaged in a topic that often presents such a stumbling block to young and growing market organizations. The Insurance Task Force will be very influential in ensuring that any resources we develop on liability are maximally relevant to the farmers market community.”
Farmers Market Liability Policy
In 2010 the Farmers Market Coalition worked with Campbell Risk Management (CRM) to create an affordable Farmers Market Liability Policy to support our members. The insurance provides markets with $1,000,000 in general liability per occurrence with a $2,000,000 annual aggregate limit for market location(s). The policy includes a blanket additional insured endorsement that automatically covers anyone with whom the market has a contractual relationship for the market grounds.
The policies managed by Campbell Risk Management have expanded and are now available in every state except Alaska. Campbell Risk Management is an admitted insurer. An insurance company that is “admitted” means it has been approved by a state’s insurance department and the company must comply with all state insurance regulations. In the event the insurance company fails, the state will step in as necessary to make claim payments.
Coverage for vendor product and general liability are NOT part of the markets insurance policy. It is highly recommended that your vendors get their own insurance to cover their operation and the products that they sell. It is also important the vendors provide you with a certificate of insurance that proves they have this coverage and that they have named your market as an additional insured on their policy.
