“Do I need insurance?”
Probably! While the risk of selling fresh produce is fairly low, most farmers’ markets require vendors to have basic liability insurance. Other types of insurance may be needed if you make processed foods or if you have agritourism like pick your own operations or a farm stand. Don’t worry, you can get this basic insurance pretty cheap, and it will keep you protected if something happens. Other kinds of insurance are less obligatory, but may be helpful in protecting your business investments.
Types of Insurance:
Liability Insurance for Markets and Agritourism
Pretty much all businesses need to have liability insurance. This will protect you if somebody slips and falls at your booth, gets sick from eating something you sold them, or experiences any other type of harm from your business. You can expect to pay under $40/month for a policy and some of them will allow you to only have coverage during your market season.
Crop and Livestock Insurance
Because the yields of farms and ranches are subject to major fluctuations due to forces outside their control (such as droughts, floods, major price changes, etc.) the USDA offers insurance policies that protect the revenue of farmers. Especially in this era of wacky weather and natural disasters due to climate change, this can be a very valuable tool for protecting your income. The cost of insurance varies significantly by your production, but can be as low as $1,500 per year, so it’s definitely worth looking into.
Whole Farm Revenue Insurance
This is an insurance program that is offered in every county in every state that covers the revenue for your whole farm, not just an individual crop (maybe you’ve heard of crop insurance — that’s for just one crop for farmers that grow just one or two primary crops). For any farmers who have under $350,000 in annual revenue, they can apply for the Micro Farm program, which requires a lot less paperwork than the standard program. Insurance must be purchased through an agent, and there is a specific window of time that it can be purchased (depending on the county, the deadline is January 31st, February 28th or March 15th).
- Fact Sheet from USDA on the Micro Farm Program
- Directory of Agents who sell Whole Farm Revenue Insurance. Note: you’ll need to add your location at the top of the page, and make sure you select “Whole Farm/Micro Farm” under the emphasis category. There aren’t a lot of folks in the state, but there are folks in CO, AZ, and CA that are also licensed in NM.
- More information on the Whole Farm Revenue Insurance Program from the National Sustainable Agriculture Coalition.
Livestock Insurance
There are two different types of livestock insurance:
- Insurance that protects against loss of animals
- Insurance that protects against price fluctuations.
Protection for the animals: these are policies that protect individual animals (useful for particularly high value animals like horses or breeding bulls), that protect herds/flocks, or that include the animals in the overall farm property insurance coverage (i.e. if your barn burns down, and 10 cows are in it, it covers both the cost of rebuilding the barn and the cows that perished).
Protection for profit: these are programs offered by the USDA that are similar to crop insurance, that protect ranchers against prices for livestock dropping. Unlike crop insurance, livestock revenue insurance can be purchased at any time during the year.
Business Interuption Insurance
This is a kind of insurance that can be added on to your property insurance that covers the cost of missed income when some factor outside of your controls forces you to close down some or all of your operations. For example, if your milking barn burns down, your property insurance would cover the cost of rebuilding the barn, but the business interruption insurance would reimburse you for the lost income for the 3 months where you can’t milk your cows because you’re rebuilding your barn.
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