How Farm Safety Practices Affect Your Insurance

David Yeager – Sr. Risk Control Representative – Westfield Insurance
Presentation at Professional Dairy Managers of PA – N0V 08 Program

• Opening – No one wants to have a fire, accident or serious claim on their farm or business. Insurance very simply is premium paid by the policy holder and covered claims paid by the insurance company. But there are things that affect the insurance and whether or not you can even obtain reasonable coverage. Large and / or frequent losses do raise questions and will need to be explained especially what has been done to prevent them from happening again. Our focus should be of course to prevent the claims from the beginning.
  • Required governmental programs (OSHA, Dept of AG) and best practices are essential key points when we evaluate risk, hazards and controls. One key item is to understand there is not an expectation of perfection. We want to provide feedback to you for the benefit of your operation to keep it operating safely and efficiently for many years to come. Talk over the issues with us if you do not understand.
  • How many farms here represent > 1 generation? Many industries operate out of tradition (been doing that way for 30, 50 100 years) and we have learned from our Parents, Grandparents, Sr. Partners and Mentors. Some practices were very good and others had issues – some we did not know about – how about asbestos? Or in my former life, riding the tailboard of a piece of fire apparatus? Also we must never assume because we know something is safe or not that others might – they may not understand or be operating with common sense.
  • We will cover each major line of coverage and go over a few items and finish with some helpful resources.
• Workers’ Compensation – let’s talk about a direct way to affect insurance and your premium!
  • WC is made up of:
    • Rate set by the state for a particular job
    • Payroll
    • Experience Modifier – the one we can affect – prevent injury, keep claims down and you will have a lower mod! The mod is a 3 year calculation so costly claims will have an adverse affect for several years – the WC hole.
  • State Certified Safety Committee – 5% WC discount – Labor & Industry website for details (examples large dairy & horse farm)
  • After the claim – Early return to work
  • Required training & programs
• General Liability – Have some guidelines for activities around your properties so everyone understands.
  • Family, Friends, Guests & Tenants
  • Recreation – “playing in the barn”, ATV’s, ponds, riding, etc.
  • Farm chores – friends or relatives “helping out” – great for cheap labor – watch out for our Kids!!!!
  • Tenant housing – good repair, exits, smoke / CO detectors, activities rules
  • Food chain safety and tracking – whether we are talking about a small produce stand or major source of food – HACCP & Farm Health Programs
  • Farming exposures – chemicals (fertilizers, spraying, etc.), animals – livestock and domestic
  • Agri-tainment – we invite the general public for events many times to supplement the farm’s primary income – Fall Festivals, Corn Mazes, Pick Your Own - This greatly increases your liability and can put a scare into your Underwriters – make sure proper controls are in place for all events including Food Safety. Have a plan.
• Property – we normally think of fire but this can include weather damage, equipment damage, etc.
  • Fire - First Things First – prevention!!!!!!
    • Separation – 100’+
    • Good housekeeping practices
    • Safe mechanical systems – heating, electrical, etc.
    • Fire protection – extinguishers – serviced!
    • Water source & fire department pre-plan – the more they know the better they can fight the fire. o Equipment – keep maintained and protected – trained operators only!
  • Building weather resistance & structural integrity – keep the water out and keep it from falling over / blowing away.
• Vehicle / Road Operations – one of the most dangerous things on Earth! This includes your over the road motor vehicles as well as the farm equipment that needs to travel the roads as well.
  • Safe, maintained vehicles & equipment
  • Safe, qualified operators – Obtain Motor Vehicle Records – We Do! – watch youthful drivers.
  • Proper warning devices, signals, etc.
  • The right registration for the right unit – Personal, Commercial, Exemption from registration, registration as a farm vehicle, general registration
  • SAFER – on line information on commercial carriers – public info
  • Know other states’ requirements of you need to travel.
  • Example – nursery delivery versus nursery delivery with planting
• Programs / Best Practices – Things start small and can get big (and out of hand) fast – a plan to handle it makes the growth go a little easier and can prevent a large loss. This is very attractive to insurance carriers (average to above). Good farm management is evident to us insurance types as we go through a farm or any operation. Pride of Ownership is a phrase I heard from a friend several years ago and describes an operation where the ownership and employees are proud of the company and it shows everywhere. Make sure all employees and supervisory staff know the program and stick to them – Start with Leading by Example.
• Watch others working on your property. Identify if they are an independent, subcontractor or your employee even if you think they are not. Obtain certificates of insurance and use written contracts as needed – ask legal counsel if you don’t know. An uninsured worker with someone else who is injured, could end up filing a claim against your coverage!
  • Assistance & Resources – HANDOUT for resources
  • Your Insurance Agent – Key individual to make sure you have the right coverage for your operation – they will help you customize your insurance program and work with the right carriers for your operation.
  • Insurance Company – ask for assistance and resources
  • Trade organizations like PDMP
  • Local / State / Federal Agencies / Educational – Penn State Coop Extension, Department of Ag, OSHA
  • Commercial Resources – JJ Keller, Gempler
  • Books
  • Online