Rachel RespondsSeptember 27, 2018

Adding value to your farm products.

Question:

Am I liable if my value-added products make someone sick?

Answer:

Despite taking the best precautions available, sometimes accidents happen. If someone is injured or sickened from products you made, you can be liable for the injured person's medical bills and other damages.

The most efficient way to manage legal liability is to make sure your business has insurance coverage and to follow the terms of the insurance policy. Under a good policy, the insurance company will provide an attorney to defend the farm. This insurance coverage is valuable even for the safest farms, since even if you’ve done nothing wrong, you’ll still have to prove that in court if you are sued.

Beyond liability coverage, you might also consider seeking a commercial insurance policy that pays some costs of a recall, should one be necessary. Commercial policies may also cover lost income and remediation costs, which are not provided in standard farm liability policies. Availability and cost for these policies vary widely.You’ll need to think about what will give you the most cost-effective protection. Asking other farmers and home-based producers in your area about what coverage they have may be very helpful in discovering your insurance options.

FOR MORE INFORMATION: Read pages 15–17 of Farm Commons’ Adding Value to Farm Products: The Legal Issues. Talk to an insurance agent, especially an agent with experience not only in farm policy coverage but also in value-added production or direct-to-consumer liability coverage. Other farmers and home-based sellers in your community may have recommendations for certain agents or companies.

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