How Can Seed Sales Affect Your Farm Insurance?
There’s no debate that farming is demanding work and farmers are hard workers. Many farmers look for opportunities to supplement their living with a side business, such as seed sales. However, there are risks when it comes to side hustles on the farm. Make sure you know the potential hazards with these types of non-farming businesses before you start a new venture.
There are three main areas of concern when considering insurance for this side business.
One risk to consider is storing non-owned seed.
There are situations where the seed dealers are responsible for storing the seed for either the seed company or customers until they can pick it up. During the interim, you are responsible for the product.
Many farm blankets and scheduled personal property do not cover non-owned property. In other words, you cannot insure property that you do not own, which could lead to a gap in coverage. Make sure to talk to your independent insurance agent regarding how much of the seed is owned and how much is non-owned to make sure you have coverage needed.
Failure to Germinate
Also consider coverage for failure to germinate. There have been claims where the seed dealer delivered the wrong bags of seed, then the farmer sprayed herbicides and pesticides and killed the crop. In these cases, the fault and liability for delivering the wrong seed can be assigned to the dealer.
Do you deliver the seed or do customers come to your property to pick it up? Both delivery methods have their own set of risks and will affect the coverages you may need to protect your farm.
With customers coming to your property, the chance for injury and a liability claim increases. Who loads the seed into the customer's vehicle? Is the driveway asphalt or gravel? Conditions of the property can determine how high of a risk the side business will be. Make sure to keep the loading area free of debris to make it safe for customers that come onto your property.
Also, the method of delivering a product can change the way a personal auto policy responds. If an employee delivers seed in their own truck, a potential gap in coverage can be created. This may also change the exposure for Workers’ Compensation coverage and change the classification of that employee.
Understanding the Risks of Seed Sales
Seed sales might be a good side hustle to make extra money, as long as you are factoring in all of the business concerns. That includes a clear understanding of who owns the seed, what happens if it doesn’t germinate, and how the final product is delivered.
As farm side businesses have evolved over time, the risks have increased. Review your policies each year with your independent agent to make sure you have the coverage you need and aren’t putting your livelihood at risk.