Business Insurance for Herb Farms

Business Insurance is designed to protect a business owner's financial assets and is an essential investment for a herb farm.

This article will cover the main insurance coverage for herb farmes, general liability insurance, and suggest other policies that are suitable for this business.

Recommended: Use our dedicated small business insurance provider, Next Insurance, to get a quote now!

General Liability Insurance For Herb Farms

All businesses, regardless of industry, face risks that should be covered by insurance. The most common and comprehensive type of policy business owners invest in is general liability insurance.

Some of the risks general liability insurance covers are:

  • Bodily injury
  • Property damage
  • Medical payments
  • Legal defense and judgment
  • Personal and advertising injury

While businesses aren't legally required to carry general liability insurance, operating without it is extremely risky. If your business is sued, you could end up facing fees totaling hundreds of thousands of dollars (or more). Having a sufficient general liability insurance policy in place to help compensate for these damages is the only way to prevent this type of event from devastating your business.

Learn more about the risks covered by general liability insurance.
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Example 1:  To gain further exposure for the business, you have signed up to sell plants and herbs at a local farmer’s market.  The market requires $1 million of liability insurance for all participants. A general liability policy will help fulfill that requirement.

Example 2:  While visiting your farm, a customer trips over a potted plant.  Her injuries require several trips to the doctor and two weeks out of work.  She names your business in a lawsuit. General liability insurance should cover your legal expenses and damages awarded by the court.

Example 3:  Unbeknownst to you, your website designer uses a copyrighted photo when designing the company site.  The photo’s owner has named you in a lawsuit for copyright infringement. General liability insurance will cover legal representation and awarded payments, up to the limits of the policy.

Of course, this is not an exhaustive list of perils a general liability insurance policy will cover, and some conditions may result in a particular peril not being covered. It's always best to talk to your agent in-depth about the specifics of your policy to avoid blind spots in coverage.

Learn more about the risks covered by general liability insurance.

Cost Of General Liability Insurance

On average, herb farms in America spend between $500 - $1,200 per year for $1 million in general liability coverage.

Check out the chart below for a snapshot of average general liability insurance expenditure across a variety of industries:

Graph showing average price of general liability insurance prices per industry

Several factors will determine the price of your policy. These include your:

  • Location
  • Deductible
  • Number of employees
  • Per-occurrence limit
  • General aggregate limit

You may be able to acquire general liability insurance at a discounted rate by purchasing it as part of a business owner's policy (BOP) rather than as a standalone policy. A BOP is a more comprehensive solution that includes multiple forms of coverage, such as business interruption and property insurance.

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Other Types Of Coverage Herb Farms Need

While general liability is the most important type of insurance to have, there are several other forms of coverage you should be aware of. Below are some other types of insurance all herb farms should obtain:

Product Liability Insurance

Product liability insurance is important for anyone who manufactures or sells a product to the public.  If a client blames your product for their injury or illness, they could hold you responsible. The policy will cover awarded damages stemming from the lawsuit, as well as associated legal fees.

Product liability insurance is tailored to your business’ specific needs and is generally sold as part of a business owners policy (BOP).

Commercial Property Insurance

For entrepreneurs in the agriculture industry, business property is an integral part of how revenue is generated.  A commercial property insurance policy protects those assets when covered losses, such as fire or windstorm, occur.  This includes business-owned buildings, inventory, and equipment.  

Commercial property insurance is typically written as part of a business owners’ policy (BOP).  Due to the unique nature of this business, farm owners are encouraged to discuss what is covered under the policy and what is excluded.  Those who wish to insure their crops should discuss optional endorsements with an insurance professional.

Types Of Coverage Some Herb Farms May Need

In addition to the policies outlined above, there are a few other types of coverage your herb farm may require depending on certain aspects of your operations. Some of these might not apply to you, so be sure to ask your agent which policies are right for your business.

Commercial Auto Insurance 

Any company that uses an automobile for business purposes will need to purchase a separate commercial auto insurance policy.  In the event of an accident, the policy will pay to repair or replace the company-owned vehicle, and extend liability to third-party claimants for personal injury and damage to their vehicle.  While the state mandates minimum coverage, business owners should consider purchasing limits higher than the mandated minimum.  

Businesses can purchase commercial auto insurance as a standalone policy or as part of a business owner’s policy (BOP), depending upon the carrier.

Workers’ Compensation Insurance

While most states require workers’ compensation insurance for businesses, the rules for agricultural workers are slightly different.  Some states require coverage when payroll meets a certain threshold, while others do not legally require any coverage. Work with your insurance agent to identify your state’s requirements and consider purchasing voluntary compensation coverage, so your employees are covered if they are injured on the job. 

This coverage is generally purchased as a standalone policy.

Additional Steps To Protect Your Business

Although it’s easy (and essential) to invest in business insurance, it should not be your frontline defense. Yes, insurance will compensate for your business’ financial losses after an incident occurs, but it’s much better to avoid losses altogether.

With this in mind, here are several things you can do to better protect your business:

  • Use legally robust contracts and other business documents. (We offer free templates for some of the most common legal forms.)
  • Set up a limited liability company (LLC) or corporation to protect your personal assets. (Visit our step-by-step guides to learn how to form an LLC or corporation in your state.)
  • Stay up to date with business licensing.
  • Streamline your business’ internal processes. This will remove unnecessary variables from common tasks and create a safe, consistent environment for conducting business.
  • If your business is an LLC, look into LLC Insurance.

Steps After Getting Business Insurance

Depending on where you are in your business building process, here are some other actions you may need to take before getting started:

Business Insurance is the Best Way to Protect Your Business

If you're starting a new business, then you need business insurance. It's as simple as that. The protection offered by an LLC will protect your personal assets, but your business's assets are still open to liability in the case of a lawsuit or other loss.

Be sure that everything you've built is safe by getting business insurance.

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Frequently Asked Questions

What is included in a business owner’s policy?

A typical business owner’s policy includes general liability, business interruption, and commercial property insurance. However, BOPs are often customizable, so your agent may recommend adding professional liability, commercial auto, or other types of coverage to your package depending on your company’s needs.

What is the difference between business insurance and general liability insurance?

"Business insurance" is a generic term used to describe many different types of coverage a business may need. General liability insurance, on the other hand, is a specific type of coverage that business owners need to protect their assets.

Do I need insurance before I start a business?

You should invest in insurance coverage for your business before your first interaction with a customer. Although the cost of insurance may seem high for a brand new business, it’s best to be proactive when it comes to protecting your assets. After all, you can’t buy insurance to cover a loss that has already occurred.

Will insurance protect my business from everything?

Not necessarily. Certain exceptions may be written directly into your policy, and some perils may be entirely uninsurable. Be sure to discuss the scope of your policy in-depth with your agent to avoid being blindsided by holes in your coverage.

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