Insurance works quite well when coverage is allowed to operate according to a given policy’s intent. In the above litigation, an injured person was denied protection under a farmowners policy. The loss involved a serious injury to a relative of the farm’s owners. The claimant was hurt when the utility vehicle he was using to spray a pasture for weeds tipped over, pinning him for hours.

The policy had an endorsement for recreational vehicles that banned coverage for loss involving their use in the farm operation. After the loss was filed, it was denied. The insurer quickly sought to reinforce its decision by asking a court to affirm its position. Click below to see how a lower and then an appellate court viewed the insurer’s decision. Take note, the court’s focus was not the same as the denial reasons raised by the insurance company.

Please click on the link to get more details on the court case.

Farm/Ranch operations are a package hybrid. Not only does the insurance package combine property and liability coverage, it combines protection for both personal and commercial loss exposures. As the case with any business sector, a few extremely large operations are dominant. However, farms and ranches still tend to, in number, consist of smaller, family-owned businesses. Owners of the agricultural operation tend to be heads of households who live and work on the premises. Therefore, personal and commercial risks of loss exist together.

However, it is a mistake to equate a small operation with being a simple one. Even the smallest farms or ranches have varied coverage needs including residential property, personal belongings, personal and business autos, barns, storage buildings, livestock, farm equipment, crop, crop storage as well as both personal and commercial liability.

Click here to see information on what is basically offered by a policy designed for farms. It is from the Personal Lines Farm/Ranch Section of PF&M found in Advantage Plus.

This month’s featured dispute is, at its core, all too common. One party purchased a policy and believed that it would address occurrences involving its business. The other party sold a policy on the basis of providing protection only for losses that fell within its policy’s coverage intent.

There can be any number of reasons why policyholder coverage expectations don’t align with what an insurer believes is its coverage obligations. Let’s mention that we’re only considering good faith on the part of both parties with regard to applying for and securing insurance.

The litigation between the farm and its insurer appears to involve a serious misunderstanding. A loss involved a situation that was a routine activity, maintaining a pasture for their livestock. However, the routine exposure, somehow, did not qualify for coverage for not one, but several reasons. Gaps such as that are preventable, but was a proper effort made to understand the policyholder’s specific coverage needs?

Click here to see an excerpt of a tool that could assist in ferreting out loss exposures for a given operation. It is from the Beef Cattle Questionnaire of the Commercial Survey found in Advantage Plus.

Sometimes an agent or broker can lack experience which could explain a coverage oversight. However, veteran insurance professionals are just as capable of failing to recognize possible coverage gaps. The latter could be due to their wearing blinders. A gap can exist from an inability to recognize a need or due to long formed perspectives being too narrow.

Both nascent and veteran insurance agents must embrace a healthy, ongoing interest in a growing knowledge base. There is, literally, always more that should be learned in order to properly serve applicants, clients and insurers. Knowledge isn’t always about policy/coverage knowledge, but in assessing needs and developing a strategy to effectively evaluate situations.

Click here to see an article excerpt on how addressing farm exposures may require taking a path that’s quite different from what one usually travels. It is from the 02/22 of Rough Notes Magazine found in Advantage Plus.