As Indiana farmers look to utilize their existing expertise and property to generate additional income, many are turning to agritourism. Before doing so, however, farmers must understand the specific liability laws and insurance considerations at play when starting such businesses.

Types of Agritourism enterprises

In Indiana, agritourism is defined as:

(1) an activity at an agricultural, horticultural, or agribusiness operation where the general public is allowed or invited to participate in, view, or enjoy the activities for recreational, entertainment, or educational purposes, including farming, ranching, historic and cultural agricultural activities, self-pick farms, or farmer’s markets;

(2) an activity involving an animal exhibition at an agricultural fair;

(3) natural resource based activities and attractions, including hunting, fishing, hiking, trail riding, camping, canoeing, kayaking, and tubing on a river; or

(4) a winter sports activity, including an activity that takes place on a facility or on grounds used for or in connection with winter sports activities.

Ind. Code § 34-31-9-2 (2011). Common agritourism industries in Indiana include:

• Self-pick farms and pumpkin patches
• Corn mazes
• Hayrides
• Cut your own Christmas tree farms
• Winery tours and tastings
• Garden tours
• Horseback riding
• Petting and feeding zoos
• Any other commercial activity connected to a farm, forest, or agribusiness use.

limited liability for agritourism

Indiana allows limited liability protection for agritourism providers when either an injury or a death of a participant occurs resulting from an inherent risk of the agritourism activity. Ind. Code § 34-31-9-10(a) (2011). This means that a participant or a participant’s representative may not make a claim against the agritourism provider if the participant was injured from an inherent risk of the agritourism activity. Ind. Code § 34-31-9-10(b) (2011). An agritourism provider, however, is subject to liability when he or she:

(1) has actual knowledge or reasonably should have known about a dangerous condition on the land, facilities, or equipment used or the dangerous propensity of a particular animal used in the activity and does not make the danger known to the participant and the danger proximately causes injury, damage, or death;

(2) fails to properly train, or improperly or inadequately trains, employees who are actively involved in agritourism activities and an act or omission of the employee proximately causes injury, damage, or death to the participant:

(3) commits an act or omission that constitutes willful or wanton disregard for the safety of the participant and caused the injury or death of the participant; or

(4) intentionally injures the participant.

Ind. Code § 34-31-9-11(1)-(4) (2011).

Importantly, to access limited liability protection the agritourism provider must either (1) post and maintain a sign with warnings of danger or (2) have a signed contract or release for participants. Ind. Code § 34-31-9-12 (2011). It is recommended that any agritourism provider consult with legal counsel to ensure the sign, contract, and/or release is appropriately formatted to ensure it maintains limited liability protection.

general insurance considerations

It is important for an agritourism provider to consider the types of risks involved in its particular industry and what types of policies may be necessary to protect its business. First, there are many different types of policies, including commercial general liability, worker’s compensation, property, automobile, health, product liability, etc. For example, an agritourism provider may be interested in commercial general liability insurance to cover a wide range of property damage, bodily injury, and personal injury claims. An agritourism provider also may be interested in purchasing automobile coverage and farm machinery coverage to protect its work vehicles and farm equipment.

An agritourism provider also may want to purchase multiple layers of insurance coverage to have extra protection against certain risks. These excess policies are added on top of the primary policies and kick in once coverage for the primary policy runs out. For example, if a primary automobile policy covers $25,000 and an accident causes $30,000 of damage, an excess policy could insure the additional $5,000.

Additionally, umbrella policies provide additional layers of coverage, which fill in any gaps in coverage. These can cover many different primary policies and are another layer of protection for an agritourism business.

Each individual policy may have different events or conditions that trigger coverage. It is important to read and understand each policy to ensure compliance with the necessary policy procedures. Some policies may trigger coverage once the loss-causing event occurs, no matter when the claim is reported to the insurer. On the other hand, some policies require notice to the insurer during a set period of time to trigger coverage.

Once a business has selected the necessary policies, it is important to keep all insurance current, retain all copies of insurance policies, maintain updated broker/agent contact information, and create a plan of action for the steps necessary when a claim arises.

agritourism insurance

Even with the limited liability protection afforded to agritourism enterprises, agritourism insurance is necessary to ensure protection. Limited liability for agritourism providers is only extended to the inherent risks of the activity. Incidents such as slip and falls, foodborne illnesses, car accidents, and others may expose an agritourism provider to liability. Further, many general liability policies may not cover the specific features of the agritourism activity. Agritourism insurance exists to help fill this void. Specialized agritourism policies vary in price depending on the types of activities, number of visitors, location, and risks associated with the land or business. Agritourism insurance should be added onto the existing general commercial liability policy, automobile insurance, and farm insurance to ensure adequate protection for all facets of the business. It is important to consult with an insurance professional and/or legal counsel to analyze the risks of the particular activities and select a policy that fits those needs.

seek coverage counsel

Agritourism insurance considerations can be complex and case-specific. When dealing with an insurance claim or contemplating insurance coverage, an agritourism provider should consider speaking with experienced insurance coverage counsel.

-Contributions by Sarah Brown, law student, IU Robert H. McKinney School of Law, Indianapolis.

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