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Liability and Insurance

How should liability issues be addressed in a farm lease?

Landowners often worry about liability and insurance when it comes to leasing farmland. Although a legitimate concern, this should not be a barrier to leasing to a farmer. Established mechanisms exist to protect farm property owners and farmers and help to minimize risk. Depending on the types of activities, equipment, other aspects of the farm business, and whether a lease includes a residence, a farm lease should require particular kinds of insurance for both parties.  There are several factors to consider when determining what kinds of insurance to require or expect in a lease. See the fact sheet Liability and Insurance and additional resources below.

For general information on insurance and liability, refer to the resources listed on page 29 of the A Landowner’s Guide to Leasing Land for Farming. This detailed guide also has sections that discuss the types of insurance that should be considered, and who usually pays for them.

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What does “additionally insured” mean in the context of a farm lease?

An additional insured is a person or organization that receives the benefits of being insured under another person’s or entity’s insurance policy. An additionally insured often gains this status by means of an endorsement added to the policy, which typically identifies the additional party—in this case, probably the landlord—by name.

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