Liability

Laurie Hodges lhodges1 at unl.edu
Thu Mar 7 10:43:46 EST 2002


There is an official word for what I'm about to describe. It is the major
reason I strongly recommend both vendors and the market itself have general AND
produce liability insurance.

I twisted my ankle severely on private property by stepping into a pothole. I
thought, "No problem. I've got medical insurance" which did cover my various
doctors and treatments. It was more or less a routine matter for the doctors
and for me. However, one day I got a call from my insurance company. They
wanted to confirm precisely where the accident occured. Since it was on private
property, they sued the property owner's insurance company for reimbursement of
the expenses they incurred on my behalf. 

This insurance to insurance transaction had nothing to do with me or the
apartment complex. When I could, I stopped by the office and told them they
needed to fix the pothole. Similarly, even if you and your customers get along
great, are wonderful people, and you are all in a  small town in the Great
Plains where everyone knows everyone, you need insurance. If your MOTHER has a
different insurance company than you have, you can find yourself in a real
pickle without product liability covereage. If someone even CLAIMS that they
got sick after eating your zucchini -- and never mind that there is flu going
around -- you will be hit, and hit hard, for payment. No one asks for "just
medical expenses" any more. The "pain and suffering" and "lost income" etc.
plus attorney and court fees will be MUCH more than the $300-$500 liability
insurance premium. As saying goes,"It's not about you." It is about money.

Don't be penny wise and pound foolish. Get insurance. It is deductible as a
business expense at tax time. Check with your accountant on how this works and
what you need to do. 

Having product liability insurance is often a requirement to sell to grocery
stores, restaurants, schools, etc. When they say you need to be "an approved
vendor", this is often the only thing you need to show proof of to get on the
approved vendor list. 

It also definitely indicates to others that you are serious about your farm
market enterprise -- that it isn't a hobby. 
 
-----
Dr. Laurie Hodges, Vegetable Specialist, CPH
377 Plant Sciences - University of Nebraska
Lincoln, NE  68583-0724
phone: 402-472-1639 FAX: 402-472-8650
e-mail: lhodges1 at unl.edu 
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