A new insurance product is available nationwide to provide both general liability and product liability coverage for farmers market vendors. The National Farmers Market Vendor Liability Insurance Program was developed by Campbell Risk Management, a company in Indianapolis, in collaboration with the Farmers Market Coalition and several state farmers market associations.

The policy provides coverage of $1 million per occurrence with no deductible, with a $2 million annual aggregate limit. It costs $350 per year in most states; $250 in Florida and $425 in California. The premium is likely to rise to $425 in most places next year, according to Larry Spilker of Campbell Risk Management. Growers can sign up this year at the lower rate, and be covered for one year from the date the policy is issued. The policy is not available for terms of less than a full year.

A vendor can sell at an unlimited number of farmers markets under the policy, as long as the underwriter is notified in advance of the location of the market. But the program does not cover activity any place other than farmers markets, so growers still need to maintain their farm or homeowners policy for general liability and, if necessary, buy a separate product liability policy for sales to supermarkets, restaurants, schools, and other markets.

Spilker said that it took a year to research the issue of farmers market insurance and persuade an insurance company to underwrite the policies. What he found was that although farmers market claims are not common, they do happen. General liability claims, such as when a customer trips and falls or gets hit with a windborne canopy, are more common at farmers markets. Product liability claims, such as a customer getting sick from meat or produce, are rare — Spilker did not know of any at a farmers market — but insurers consider it very risky and either won’t cover it or charge high premiums for it.

Campbell convinced the underwriter (The Hartford insurance company) that the “premium pool” — the number of vendors who will buy the policy — will be sufficient to cover claims. The demand for this kind of insurance is likely to increase in coming years because of a trend by markets to require their vendors to be insured.  As an example, Spilker  said of a farmers market in Houston, “their insurance company issued an ultimatum that said if they did not require vendors to carry their own insurance and name the market as additional insured, they were going to cancel the policy for the market.”

The program, launched this year, has already been purchased by about 250 farmers, he said.
“Vendors have been frustrated at trying to find insurance because it’s either cost prohibitive or the people they’re talking to don’t understand the risk, don’t understand what it is they do at farmers markets,” Spilker said. “So having a national program where people understand what’s going on…a majority of vendors that call are thanking me right and left. It’s been a blessing to a lot of smaller producers out there who don’t know where to turn.”

Campbell Risk Management is also developing an insurance product to protect directors, officers, and staff of farmers markets. The Farmers Market Coalition will be offering that to members beginning this fall.
You do not need to be a member of the Farmers Market Coalition to purchase the vendor liability insurance, but membership is encouraged. You can learn more about both insurance products, as well as general issues pertaining to farmers market insurance at www.farmersmarketcoalition.org.

You also can phone Larry Spilker of Campbell Risk Management at 800-730-7475; or email lspilker@campbellrisk.com.