Summary: AAIS developed its farm umbrella program in response to the growing liability exposures that face today's farmowners. These increased exposures result from many different factors.

The first is the consolidation of farms into fewer, larger, more capital-intensive operations. As a result of this consolidation, farmowners' liabilities and the assets they need to protect have grown to large dollar amounts. Often these amounts are more than the coverage offered by standard farmowners, auto, and other liability policies. Another reason is that farming can be a dangerous occupation, as farm liability claims tend to involve serious, often disfiguring injuries.

Although most U.S. farms remain family-owned operations, more of the work is being done by hired farm help. In many states, the workers compensation laws specifically exempt these farm employees from workers compensation coverage. If a farm employee is injured on the job, he or she may sue the farmowner-employer in order to recover and to be compensated for their injuries.

In addition to the employers liability exposure, farmers' commercial auto exposures have increased. They now transport equipment and commodities over ever-greater distances. The very nature of farming involves the use of pollutants – fertilizers, pesticides, and herbicides – as well as growing volumes of animal waste from large livestock confinement operations.

Finally, the overall increase in litigation requires that farmowners have sufficient liability insurance to protect them against potential lawsuits.

Topics covered:

Introduction

Insuring agreement and definitions

Principal coverage

Defense coverage

Exclusions

Insured's duties

Insurer's limit of liability

Excess insurance

Conditions

Introduction

The AAIS personal farm umbrella program is designed to be used with the AAIS farmowners program, and uses the Personal umbrella liability coverage form (farm), UM 0002. This form adds umbrella coverage over an AAIS Personal (Farm) Liability Form (GL-2).

The personal umbrella liability coverage form provides standard bodily injury/property damage liability coverage beyond the limits of the underlying personal liability policy. It provides coverage above a self-insured retention for an occurrence that takes place during the policy period. The coverage responds to occurrences that arise out of the insured premises and the personal activities of the insured. In addition, the policy provides coverage for personal injury liability when the insured carries this coverage in the underlying policy.

The personal umbrella policy covers the insured's liability for damages arising out of watercraft or motor vehicles covered by the underlying policies.

The AAIS umbrella does not include coverage for automobile no-fault, uninsured motorists, underinsured motorists, or similar coverage, unless required by state law. In those states, endorsements are available to provide the coverage.

Insuring Agreement and Definitions

In return for “your” payment of the required premium, “we” provide the coverages described herein subject to all the “terms.”

DEFINITIONS