Beyond Farming: Agritainment and Farm Liability Coverage

The business of operating a farm has evolved significantly in the past several years. It’s not just about planting, caring for, harvesting and selling crops. It’s often about other ways that the land can be used.

It may be family-friendly adventures, experience-based bed and breakfasts, or seasonally themed day trips, but today’s family farm is about much more than just farming.

The term “agritainment” was not a part of the ISO FL 00 20 Farm Liability Coverage Form in 2006, but when a revision was published in 2016, the word was defined, and an exclusion was created for it.

Here’s the definition.

“Agritainment” means an agricultural or aquacultural related activity or enterprise that is primarily operated on the “insured location”:

a) For the purposes of tourism or entertainment; and

b) Engaged in for monetary or other compensation.

Because the word is now defined in the policy, that must mean the policy writers considered that there would be an exposure, and therefore considered how to best cover that exposure. They drafted an exclusion for the unendorsed Farm Liability Coverage Form (FL 00 20 04 16).

This exclusion falls under Coverage H – Bodily Injury and Property Damage Liability.

Here’s the exclusion.

bb. Agritainment

“Bodily injury” or “property damage” arising directly or indirectly out of any “agritainment.” This exclusion applies but is not limited to an act or omission, regardless of its nature or circumstance, involving a service or duty rendered, promised, owed, or implied to be provided because of the nature of the “agritainment.”

There is a similar exclusion in the Personal and Advertising Injury and Medical Payments sections of the policy, excluding coverage for personal and advertising offenses and coverage for medical payments related to agritainment.

Any insured with a farm policy based on the unendorsed ISO Farm Liability Coverage Form would therefore potentially have no coverage for corn mazes, pumpkin patches, u-pick patches, holiday extravaganzas, or any other exposure that might fall under the broad definition of agritainment.

As is often the case, when an exposure that could be covered is excluded, a companion endorsement that could provide coverage for certain elements of the exposure is published. Enter ISO form FL 05 01 04 16 Agritainment – Liability.

Consider some of the exposures that an agritainment operation may include:

• They may have a restaurant, and restaurants often include the service of alcoholic beverages.
• They may have a brewery, winery or distillery, where alcoholic beverages are crated and served.
• They may have hayrides pulled by a tractor or horse; trail rides on horseback; a petting zoo; or some other operation that uses equipment or animals.
• They may have rooms available for visitors to stay in, whether it is in a traditional bed and breakfast manner, or through home-sharing networks.

With those potential exposures in mind, this endorsement appears to allow for the insured to make sure that they have the proper coverage in place. The insured can indicate that certain exclusions do not apply on the first page of the endorsement. At first glance, it appears that the insured will receive broadened coverage based on what agritainment operations are going on.

To make sure, we need to look at a few places in the endorsement. The first will be the revised definition of agritainment.

Definition 3. “Agritainment” is replaced by the following:

“Agritainment” means an agricultural or aquacultural related activity or enterprise described in Item B. of the Schedule that is primarily operated on the “insured location”:

a) For the purposes of tourism or entertainment; and

b) Engaged in for monetary or other compensation.

In comparing the definitions, we find that there is a small (but significant) difference between the definitions. The additional words are very easy to miss, but they are there. The endorsement changes the definition of agritainment to limit it to agritainment “…described in Item B….”

By itself, the change in wording may not be that significant, so we need to look at how it is used. We need to see what the endorsement does with the existing agritainment exclusion.

Coverage H Exclusion 2.bb. (agritainment) under Section I – Coverages, Coverage H – Bodily Injury and Property Damage Liability is deleted.

Exclusion 2.f. (Liquor Liability) is replaced by the following:

f. Agritainment

Any person injured while on the “insured location” by reason of “agritainment” being engaged in there. The Exclusion f. applies but is not limited to an act or omission, regardless of its nature or circumstance, involving a service or duty rendered, promised, owed, or implied to be provided because of the nature of the “agritainment”.

The only exception to this exclusion is an “occurrence” of “bodily injury” to a person, other than an “agritainment employee” of an “insured,” while on the location described in the Schedule by reason of the “agritainment” described in the Schedule. However, this exception does not apply to expenses for “bodily injury” that:

1) Arises out of “your products”:

a) Intended for bodily consumption; and

b) Manufactured, sold, handled or distributed in connection with the conduct of the ” agritainment” described in the Schedule, when conducted by you or on your behalf; and

2) Occurs after you have relinquished possession of those products described in Paragraph f.(1) above.

The new exclusion provides coverage for bodily injury related to the agritainment operation as long as that bodily injury has nothing to do with any product meant for bodily consumption. That may be an indication that the insured needs another endorsement (or another policy) to cover bodily injury related to foods and other products meant for consumption.

There is no indication that this endorsement gives back the property damage that was removed under the original exclusion. The exception to the agritainment exclusion is specific to bodily injury. There are other items to consider in this endorsement, and there are certainly carrier-specific endorsements and policies that provide coverage differently.

Thus, it is still important to read the whole policy, including all endorsements. We cannot simply add an endorsement and hope that it does what the customer needs for it to do. The only way to know for certain that an exposure is covered is to read the policy.

Wraight is the director of the Academy of Insurance. Phone: 800-897-9965 ext. 130. Email: pwraight@ijacademy.com