Definitions

Principal coverages

Supplemental payments

Duties in case of loss

Insurer's limit of liability

Conditions

Nuclear energy liability exclusion

Introduction

 The AAIS Agribusiness Commercial General Liability Coverage form can be combined in a package policy with other farm, auto, workers compensation, and property forms. The form functions like a commercial general liability form as it provides coverage for all operations unless excluded by the policy.

 Eligible risks include farms, ranches, growing operations, equine operations, agritourism events and activities, selling or buying agricultural goods and products, agricultural commodity processing operations, goods from agricultural products manufacturing, agricultural service providers, lawn and garden operations, and lumber and timber operations.

 Personal liability coverage may be added via endorsement AL 0170.

 Definitions

 The definitions section contains the typical definitions found in most general liability forms with none that specifically apply to farms or agriculture. There are thirty-four definitions, including definitions for advertisement, auto, basic territory, bodily injury, controlled substances, coverage territory, covered contract, damages, declarations, designated insured, electronic data, employee, executive officer, fungus or related perils, impaired property, indemnitee, insured, leased worker, limit, loading or unloading, mobile equipment, occurrence, personal and advertising injury, pollutants, products, products/completed work hazard, property damage, short-term rented premises, silica, suit, temporary worker, terms, volunteer worker, and your work.

 Principal Coverages

Coverage L under the principal liability section is for bodily injury liability and property damage liability. The form promises to pay for sums the insured is legally obligated to pay due to bodily injury or property damage caused by an occurrence that takes place in the coverage territory—during the policy period—and that is not a continuation of, resumption of, or change in bodily injury or property damage that was known by the designated insured prior to policy inception. Many typical general liability exclusions apply to this coverage section. The pollutants exclusion contains an exception for damage arising out of the heat, fumes, or smoke of a fire set for the purpose of burning off crop stubble or other vegetation.

 Coverage M is for medical payments for medical expenses for bodily injury caused by an accident occurring on premises the insured owns or rents, on ways immediately adjoining premises owned or rented by the insured, and due to the insured's operations. The expenses are paid regardless of fault if they arise from an accident occurring in the coverage territory and during the policy period, are reported within one year, and the injured person submits to medical exams by doctors chosen by the insurer.

Medical expenses are paid for first aid; ambulance, hospital, professional nursing, and funeral services; and medical, surgical, x-ray, and dental services. Again, typical general liability exclusions apply.

 Coverage N is for farm chemicals limited liability. The form will pay for physical injury to property the insured is legally obligated to pay caused by the discharge, dispersal, release, or escape of chemicals, gases, or liquids used in normal and usual farming operations from premises owned, rented, leased, or occupied by the insured and that are used for farming operations. Coverage for bodily injury is available by endorsement.

 Coverage is excluded for chemicals, gases, or liquids escaped, discharged, released, or dispersed from an aircraft. The insurance applies only to physical injury caused by an occurrence, that takes place in the coverage territory—during the policy period—and that is not a continuation of, resumption of, or change in bodily injury or property damage that was known by the designated insured prior to policy inception.

 Indirect or consequential damage is not considered physical injury under Coverage N. Examples of indirect or consequential damage includes loss of use of soil, animals, water, crops, or other property; loss of value; or loss of market.

 Losses or expenses arising out of requests, demands, statutes, orders, or regulations that require testing for, monitoring, removing, cleaning up, treating, containing, neutralizing, or assessing the effects of chemicals, gases or liquids are not covered. Also excluded are losses or expenses arising out of claims or suits from governmental bodies for the same activities. But, liability for damages the insured incurs for these activities without a request, demand, statute, order, or regulation or a governmental claim or suit for them is not excluded.

Physical injury to property that arises out of farming operations violating ordinances or laws is also excluded, as well as expected or intended injury resulting from the insured's intentional and malicious acts.

 The policy does not cover physical injury liability that the insured assumes under contract or agreement except for liability for damages would have had without the contract or agreement or due to physical injury liability assumed in a covered contract if it occurs after the contract has been executed.

 Coverage N does not apply to physical injury to property the insured owns, rents, borrow, occupies, or leases.

 Coverage O is for fire legal liability. The amount the insured is legally obligated to pay for property damage to buildings or parts of buildings rented or loaned to the insured caused by fire or explosion is covered. The property damage must occur in the coverage territory and during the policy period and be caused by an occurrence. Property damage liability assumed under contract or an agreement to indemnify any person or organization for damage by fire is excluded, as well as property damage arising out of rendering a professional service or failure to do so. Intentional and malicious acts resulting in expected or intended property damage is also not covered.

 Coverage P gives the insured personal and advertising injury liability coverage. This coverage is on an offense basis, not an occurrence basis. The offense must be committed during the policy period and within the coverage territory. Offenses differ from occurrences in that an occurrence is defined as “an accident and includes continuous and repeated exposure to similar conditions,” while an offense is one of a list of actions causing injury. The list includes oral or written publication of material that slanders, libels or disparages a person, organization, or their goods, products, or services, or violates a person's right of privacy. Other offenses are false arrest, detention, or imprisonment; malicious persecution; misappropriation of advertising ideas; copyright, slogan, or trade-dress infringement; and wrongful eviction from, entry into, or invasion of the right of private occupancy of a room, premises, or dwelling. Exclusions similar to those found on the CGL form apply. See CGL Coverage Form — Coverage B

 Supplemental Payments

 The insurer promises to pay, with respect to any claim or suit it defends, the following: 1. the court costs taxed against the insured, not including attorney fees; 2. Costs incurred by the insured. 3. The insured's loss of earnings for time spent away from work at the insurer's request, up to $250 per day; 4. All reasonable and necessary expenses incurred by the insured at the insurer's request to assist the insurer in investigating or defending the claim or suit; 5. Prejudgment interest awarded against the insured on that part of the judgment the insurer pays. The provision states that if the insurer makes an offer to pay the applicable limit of insurance, it will not pay any prejudgment interest for the period of time after the offer is made; 6. All interest on the full amount of any judgment that accrues after entry of the judgment and before the insurer has paid or offered to pay or deposited in court the part of the judgment that is within the applicable limit of insurance. If the insurer decides to appeal a judgment against the insured, any interest on that judgment that accrues will be paid by the insurer and not the insured; 7. The cost of appeal bonds or bonds for the release of attachments, up to the limit. The insurer is not required to furnish or apply for these bonds; 8. The cost of bail bonds, up to $500. These bonds must be required due to accidents or traffic law violations arising out of the use of a vehicle to which the policy's bodily injury liability coverage applies. The insurer does not have to actually furnish or apply for the bonds.

 The form states that the payments are in addition to the policy limits.

 This section is similar to the supplementary payments section of the ISO CGL form. See General Provisions of the CGL.

 Duties in Case of Loss

 The form contains standard duties of the insured in the event of a loss. The insured must submit written notice if there is an occurrence, offense, or injury, or if the insured becomes aware of any possible claims or suits. The notice must include the insured's name; policy number; time, place, and circumstances of the occurrence; and the names and addresses of all potential witnesses and claimants. All insureds who are involved in the occurrence must cooperate with the insurer in the investigation.

 If the insured makes a payment without the insurer's consent, the insured is responsible for paying that expense, except for first aid to others the time bodily injury occurs.

If a claim or suit is brought against any insured, the insured and any other insured involved must promptly send the insurer copies of all legal papers, demands, and notices in connection with the claim. At the insurer's request, the insured must provide written authorization to obtain records and cooperate in settling and investigating the claim, enforcing rights against all parties, securing and giving evidence, and obtaining the attendance of all witnesses.

 Insurer's Limit of Liability

 The most the insurer will pay is the limit of insurance, regardless of the number of insureds, persons or organizations that sustain injury or damage, or claims or suits made. The general aggregate limit is the most the insurer will pay for all coverages except the products/completed works hazard, which has its own aggregate limit.

 The each occurrence limit applies to damages under Coverage L and Coverage O and medical expenses under Coverage M for a single occurrence. The personal and advertising injury limit applies to Coverage P. Both are subject to the general aggregate limit.

 The most payable for damages due to property damage to short-term rented premises is $50,000 for any one premises; damages covered under Coverage O are not subject to this limit. The most payable for damages due to property damage under Coverage O is $50,000. Both are subject to the each occurrence limit and the general aggregate limit; a different limit can be shown in the declarations for both.

 The most available for bodily injury to any one person is the medical payments limit, which is subject to the each occurrence limit and the general aggregate limit.

The farm chemicals limited liability aggregate limit is $25,000 unless a different limit is shown in the declarations.

 The general aggregate limit, the products/completed work hazard aggregate limit, and the farm chemicals limited liability aggregate apply separately to each twelve-month period, which begins at the coverage part inception date in the declarations.

 Conditions

The form contains standard conditions, including the following: bankruptcy or insolvency of an insured does not relieve the insurer of its duty under the form. Terms of the policy that are in conflict with state statutes are amended to conform to the statutes.

 Insurance under the form is primary and is not reduced due to other applicable insurance. If there is other primary insurance, the insurer will share the loss either by contribution up to the policy limit or the proportion of the loss to which the applicable limit bears to the total applicable limit for all insurance, depending on the wording on the other primary policy(ies).

The insurance is excess to any other insurance providing fire, extended coverage, builders' risk, installation risk, or similar coverage for “your work”; fire insurance for premises the insured rents or temporarily occupies; or insurance the insured purchased for its liability for property damage to premises it rents or temporarily occupies. The insurance is also excess to other insurance that applies to loss arising out of maintenance or use of covered aircraft, autos, or watercraft or for insurance on which the insured is an additional insured. For insurance that is excess, the insurer has no duty to defend unless no other insurer does so. The insurer will pay its share of the excess over the amount that the other insurance pays and the total of all deductibles and self-insured amounts.

 The form states that the insurer will be deemed to have knowledge of bodily injury, property damage, or physical injury to property when a suit, claim, or demand is received; when a designated insured reports bodily injury, property damage, or physical injury to property; or when the designated insured becomes aware of an occurrence, whichever happens earliest.

If the insurer adopts a form revision during the policy period that broadens coverage without additional premium, it will automatically apply and also applies if adopted within sixty days before the policy's effective date.

 Coverage is void if the insured conceals or misrepresents facts or interests related to the insurance or has committed fraud or false swearing.

 Premiums are calculated according to the insurer's rules and rates. Coverage applies separately to each insured, which does not affect the limits.

 The insurer may obtain subrogation rights if it pays under this form. An insured may not bring suit against the insurer unless all terms of the policy have been met and the amount of the insured's liability has been determined.

 Nuclear Energy Liability Exclusion 

 This exclusion is almost identical to the broad form nuclear energy exclusion, IL 00 21 09 08. See Nuclear Energy Liability Exclusions.