Farm Workers’ Compensation

The laws vary by state, but a general rule is that family members who work on a farm are not required to have insurance coverage. However, most farm owners who do use family members in the workforce, even casually, get some type of insurance coverage for them.

In some states, even though there is an exemption for family members with regards to coverage, if a farm owner decides to purchase a Workers' Compensation plan for one family member, the owner must purchase coverage for every family member. There’s no picking and choosing which family members to cover. It’s either all or none.

Farm owners need to be careful to check with state requirements on this topic because there are widely differing requirements in terms of whether insurance is required, what type it needs to be, and what the definition of “family member” is.

Typical plans for family members, when they are in effect, can cover major segments of financial loss like wages, medical expenses, and rehabilitation services. Note also that the definition of “family member” varies from state to state but usually includes spouses, common-law partners, immediate siblings, in-laws, guardians, foster parents, step-relatives, and generally anyone you might consider to be a part of your family.

As with many other aspects of insurance coverage for farm employees, laws vary by state. However, there are some common characteristics that are part of the coverage requirements of many U.S. states.

Usually, Workers' Compensation policies are not required for farm employees who are not members of the farmer/owners’ family. That typically means a farmer need not have coverage on him/herself or on family members.

Just because coverage for family members and farm owners is not required does not mean it’s a bad idea. On the contrary, many farmers operate on the principle of “the more insurance coverage, the better.” That’s why it is common for farmers to purchase compensation coverage policies for themselves and their family members who work on the farm.

A policy for the farm owners can include income replacement, health/medical expense reimbursement, and services like rehabilitation. Additionally, they need not be the sole owner of a farm to obtain coverage. Most state laws allow for “self” policies for partners, sole proprietors, and even farm corporation directors to obtain coverage for themselves only. This also applies to owners in the wider category of agricultural businesses that are not usually thought of as farms.

Technically speaking, many farm owners aren’t required by law to hold a Farm Workers' Compensation policy on themselves, but it is usually a good idea to have one.

The question often arises about coverage for small farms and agricultural businesses that fall into the "family farm" category (where just a few people are responsible for the entire operation). As noted earlier, many states have laws that specifically state for whom, and how much insurance coverage is required. Other states don’t publish requirements, they simply allow farm owners to make their own choices.

A common rule in the U.S. allows for coverage requirements for non-family workers only. That means an owner of a small farm that only employs family members might not be legally required to obtain Farm Workers' Compensation policies.

Even when that is the case, many owners choose to purchase policies for themselves and their family members. This usually makes good economic sense because the policies cover lost income, medical injuries as a result of farm work, and can also cover rehabilitation services.

In cases where non-family members work on the farm, even when there are just one or two, most states require a farm owner to have some form of coverage for the workers. Typical legal exemptions are commonly in place only for the owners and the family members of the owner. It is important for any farm owner to check with their state regulations and see what their specific, local requirements are.