There are many reasons farm owners have farm workers compensation insurance. One of the most import is that farming is one of the most dangerous of businesses when it comes to work-related injuries. Farm insurance is key to protecting the financial security of any agricultural business.
Government data compiled by the Centers for Disease Control revealed there are in excess of 2,000,000 full-time employees in the farming industry in any given year. And each day more than 100 farm employees lose work hours due to job-related injuries. Sadly, about seven people also lose their lives each year as a result of farm-related work injuries.
Farm workers compensation insurance is a central part of any farm owner’s business protection package. Primarily designed to protect owners and workers in the event job-related accidents, farm workers compensation policies are in place to cover accidents and losses both on the work site and off. This means coverage can effectively cover accidents that happen outside the farm, such as when a worker is conducting business in the city or elsewhere.
Farm insurance policies also have the potential to cover multiple types of personal injuries and even property damage to equipment, structures and animals. A short list of typical areas of coverage includes crop damage, diseased livestock, weather-related incidents, fires, crop losses due to pests, crop failures, and more. Specifically, workers compensation policies are written for the purpose of reimbursing farm employees who incur injuries that are a direct result of job activities.
The farming industry includes many jobs that are highly dangerous and have a high incidence of claims, compared to other types of businesses. Farm workers compensation policies can be as general or as specific as needed, but should be carefully designed to match the unique aspects of a particular farm’s work force and job descriptions.
It’s quick and easy to get a detailed farm insurance quote from a top provider like Alchemy Insurance. The types of coverage that provide protection to farm workers include policies written for specific job environments that most closely match the ones in which the workers are employed. Two parts of a typical policy include farm employers liability (to protect the financial interest of farmers/owners) and farm employees medical payments (to pay for medical expenses if workers experience bodily injury on the job).
Covered injuries must, by definition, arise out of the specific farming job and must take place on an “insured location” in most cases. It is important to note that not every U.S. state requires farmers to purchase workers compensation policies, but many do have such a requirement. A farm insurance quote is always a good starting point for those who have questions.
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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 that a farmer need not have coverage on him/herself or on family members.
Just because coverage for family members and farm owners are 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.