ELIGIBILITY REQUIREMENTS FOR THE ISO FARM PROGRAM

(April 2023)

Program eligibility is broad and comprehensive. The named insured must be an owner or a tenant with an insurable interest in a farm or ranch in order to be eligible. This means that an absentee landlord and a tenant farmer, along with the farmer who owns, occupies and works his own land, may take advantage of the Farm Program.

Example: Robert purchases 500 acres of land. He hopes to work the farm someday but is knee-deep in his legal career. He rents the dwelling on the farm property to a friend who also agrees to farm the land. They agree to share any profits from the farming operations evenly. Robert buys the farm policies for this property and operations as part of their arrangement.

A farm or ranch involves living crops or plants and animals. A farming operation grows and markets a variety of crops, such as grains, mushrooms, nuts, fruits, or vegetables. Operations can involve greenhouse or nursery stock, sod and flowers. Some farms raise animals or insects. Worms, bees, fur-bearing animals, livestock, chickens, and turkeys can all be part of a farm operation. The aquaculture industry is a recent and more unusual form of farming. This includes catfish and shrimp farms, as well as other water-based operations.

Example: Ed loved to eat catfish but could never find decent tasting catfish at local restaurants. The catfish at those restaurants always had a frozen taste. He contacted several area restaurant owners about this, and they informed him that catfish had to be flown to the local market from other areas. Ed saw a business opportunity, started his own catfish farm, and purchased a farm policy to cover his new operation.

ISO FARM COMBINATION POLICY ELIGIBILITY

The Farm Combination Policy has its own eligibility requirements, just as commercial insurance programs have their eligibility criteria. If a farm operation is eligible for the Farm Combination Policy, there are significant pricing credits, even though there are no coverage differences. Like the commercial package, eligibility requires that both property and liability coverages be written on the policy. In addition, all farm buildings, dwellings, and farm personal property must be insured under the policy, along with all liability exposures associated with the operation. There are some exceptions to these requirements, such as when all buildings are not under common ownership.

Certain farming or ranching operations are entirely ineligible for the Farm Combination Policy. This does not mean that the farm coverage forms cannot be used. It simply means that these operations do not receive the combination policy credits. The situations ineligible for the combination program are:

· Any farm not occupied by the insured, unless the owner is actively involved in the operation. An example is an insured that has a contract for management of the farm or a tenant operating the farm under the insured’s supervision.

· Any farm that is either vacant or not occupied.

· Any supply farm for a manufacturing operation when that farm is owned or controlled by the manufacturing operation.

· Any farm engaged in dehydrating or freezing operations or acting as a poultry factory.

· Any farm with dwellings on the farm premises designed to house more than four families.

· Any farm premises with structures house activities that are not part of the farm operation and have not been added or endorsed to the policy.

Example: Mike is an avid hunter. He decides to take classes in taxidermy so he can do his own work instead of spending money on outside taxidermy services. This hobby initially involved only the animals he and his family killed. Now he regularly accepts work from others in the hunting public. He has a building on his farm used exclusively for his taxidermy business, but because this is a separate business operation that is unrelated to the farm operation, Mike’s farm is not eligible for coverage under the Farm Combination policy. The business and the building will not be endorsed onto the farm policy.

Note: There is no requirement that a particular form or forms be used to qualify for the Farm Combination Policy. This is a particularly important point. Because of this, for example, the Commercial General Liability policy may be used in place of the Farm Liability Policy and would not compromise or affect the program eligibility requirements.