[Market-farming] another insurance question

Kakerby kakerby at aol.com
Fri Mar 8 03:42:07 EST 2013

Most of you know that we've been trying to straighten out an insurance mess, which has gotten more sporting by the day.  I'll leave off the part about how the initial agency totally goofed up; we all make mistakes and they made a few.  We're trying to put that behind us and move on with a different agent and one of two seems-better-on-paper policies.  But I'm troubled now by what we're seeing from those "better" policies.  I wanted to see if other folks have found the same thing.

In a nutshell, across the spectrum of possible farm products, we are finding that we can meet and exceed local, state and/or federal regulations for food production.  Yet we can't get insurance even when following those procedures.  I know this is a grower's list rather than a livestock list, but humor me while I elaborate on what we've found.  For instance, in the state of Washington, we have a state permit called the Special Poultry Permit, which allows small scale producers to butcher up to 1000 birds per year (chickens, ducks, turkeys, etc), on the farm, and sell them direct to the customer.  The customer must come to the farm to get them.  We can't even take them to the farmer's market.  OR, we can take the birds to a poultry processor with a state meat processing license.  After the birds are processed, we come get them, and distribute them to our customers.  Both the small-scale Special Poultry Permit, and the larger poultry processing permit, have stipulations for how quickly the birds are chilled, how the evisceration is done, how long they can stay in storage, what temps they must be stored at, etc.  Both the special permit and the processing permit are inspected on a yearly basis.  The processing permit also has, I believe, an inspector standing there watching every bird that is butchered.  

But it turns out, the insurance agencies follow their own rules for what they want to see and not see.  If an operation doesn't follow the procedures the insurance agency wants to see, we either can't get insurance for that, or coverage is prohibitively high.  With my above example, one of the things they want to see is that when birds go to butchering, they STAY at the butchers where the customers pick them up.  They never come back to the farm, because then there are (according to the insurance folks) problems with temperature control.  So they simply don't allow the birds to come back to the farm.  On-farm processing is flatly denied coverage by a lot of carriers, or priced so high that most small operations can't afford it.  In our case, the agent we're working with now tried to steer me away from that latter policy which would allow us to butcher on-farm.  She said it was going to be priced so high, we'd never make money with those birds.  We're getting a price quote for that policy anyway, just to see how high it's going to be.  But realistically, we're looking at not even doing birds this year.  That's a major hit to our operational and income plans.  Realistically, we can get whatever permits we want, but it doesn't matter.  We can't get coverage for it.  So we have to decide whether we're going to go the safe route and only engage in insured activities, or carry on with a major farm income source, without liability insurance for it.  Functionally, insurance has become a third tier of regulatory oversight, which has rules or requirements that contradict, override and/or fly in the face of all the other state and federal rules.  And that new set of regulations is being set not by science, not even by folks familiar with normal farming practices, but rather by trends in lawsuit precedence.  And/or by stockholder and board of directors comfort level.  It's insane.

I guess I'm scratching my head tonight, wondering if we're the only ones seeing this.  Is this just because we're a new policy for these carriers?  Or have other folks experienced this as well?  Given the paperwork I've been filling out, I have a hard time believing they would relax these rules once we've had a policy with them for any length of time.  Are we being abnormally cautious, and most farms simply run without coverage?  I also can't believe for a minute that with the new food safety rules, insurance agencies aren't watching that closely and coming out with new-and-improved ways to dictate coverage for veggie growers as well.  We don't do much veggie growing at the moment (and FSMA hasn't warmed us up to the idea of going back to it either), so maybe this is just meat production?  Or are other folks seeing this too?
Kathryn Kerby, perturbed by contradictory rules
Snohomish, WA
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