Hydroponic Farm Business Insurance
Getting insurance for your hydroponic farm is essential.
Hydroponic farms can face numerous risks during their operations, including property damage, personal injury, or breach-of-contract lawsuits.
For example, your farm equipment could be damaged, someone could be injured on the job, or one of your suppliers could sue your farm for breach of contract.
We’ll help you find the most personalized and affordable coverage for your unique business.
Recommended: Next Insurance is dedicated to matching small businesses with the right policy at the best price.
Best Insurance for a Hydroponic Farm Business
General liability insurance is — generally speaking — one of the most important insurance policies for hydroponic farms.
Some of the risks general liability insurance covers are:
- Bodily injury
- Property damage
- Medical payments
- Legal defense and judgment
- Personal and advertising injury
While general liability insurance offers great overall coverage, there may be certain risks that your business could encounter that are not included in this type of insurance. Therefore, to manage these risks, you may want to think about obtaining supplemental insurance policies.
- In the event of significant business interruption, such as a natural disaster or power outage, business income coverage can provide financial protection by covering expenses like lost income and relocation costs.
- To safeguard against allegations of professional negligence or failure to provide adequate advice or service, professional liability insurance can cover legal fees and damages.
- Workers’ compensation insurance can help cover medical bills and expenses related to sickness or injury that occurs as a result of work performed on the job.
In general, when purchasing business insurance, you'll have the option to select from two types of insurers: traditional brick-and-mortar insurers (e.g., The Hartford, Hiscox, and Nationwide) and online insurers (e.g., Next and Tivly).
We suggest going for online insurers as they tend to provide better value for your money. Their cost advantage stems from their digital business model, which allows them to offer lower quotes by keeping their operating costs down.
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Cost of General Liability Insurance
The average hydroponics farm in America spends between $400-$1,500 per year for $1 million in general liability coverage.
Compare the average cost of general liability insurance for a hydroponic farm business to other professional industries using the graph below.
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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Common Situations That General Liability Insurance May Cover for a Hydroponic Farm Business
Example 1: Your employee is taking visitors on a tour of your hydroponic facilities when one of the visitors trips over a power cord and stumbles into a lighting installation. The cost of treating the visitor’s injuries will be covered by your general liability policy, and if he or she files a lawsuit, the policy will cover your legal costs.
Example 2: An employee is loading boxes of produce into the back of a customer’s truck with a forklift. She loses control of the forklift and drives it into the side of the customer’s truck. The cost of repairing the damage to the truck should be covered by your general liability policy.
Example 3: A competing hydroponic farm files a lawsuit against your company claiming libel and slander. Your general liability policy will cover the costs of hiring a legal defense. If you wind up paying a settlement to the competitor, your policy will cover the costs of that as well, up to your policy limits.
Other Types of Coverage Hydroponic Farm Businesses 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 of the most common types of coverage:
Workers’ Compensation Insurance
Running a hydroponic farm typically requires employees. If your company has hired one or more people, you are required by law to carry workers’ compensation insurance. Your insurance policy will help to pay for any medical care required by workers who are hurt while doing their jobs. The policy will also help to cover lost wages for an employee with a work-related injury.
Commercial Property Insurance
A commercial property insurance policy will help you cover the costs of replacing your hydroponic equipment in the event of a major accident. For instance, if a fire breaks out and destroys your equipment, your commercial property policy will pay for the replacement of that equipment up to your policy limits.
Commercial Auto Insurance
If you have any vehicles that you are using primarily for business, such as a delivery truck for your products, then you are required to carry commercial auto insurance. Your policy will pay for damage caused by employees driving your company vehicles.
Commercial Umbrella Insurance
A commercial umbrella insurance policy is designed to take over when your general liability insurance policy reaches its limit. For instance, you may find your company in a legal situation where your obligation turns out to go beyond your policy limits. When that happens, your commercial umbrella coverage will kick in and protect you from needing to pay the expenses beyond your coverage limits out of pocket.
Additional Steps To Protect Your Business
Although it’s easy (and essential) to invest in business insurance, it shouldn’t be your only defense.
Here are several things you can do to better protect your hydroponic farm business:
- Use legally robust contracts and other business documents. (We offer free templates for some of the most common legal forms.)
- Set up an 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.
- Maintain your corporate veil.
Hydroponic Farm Business Insurance FAQ
Yes, absolutely. You will need to first get a quote from an online business insurance provider like Next Insurance. Next allows you to then purchase a policy immediately and your coverage will be active within 48 hours.
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.
"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.
Yes. Securing business insurance prior to accepting your initial customer is crucial for ensuring the long-term financial stability of your enterprise.
It's also essential to keep in mind that if you have company vehicles or employees, you may need to acquire commercial auto insurance or workers' compensation insurance, respectively, as mandated by your local laws.
Not necessarily. Certain exceptions may be written directly into your hydroponic farm business insurance policy, and some perils may be entirely uninsurable.
Yes, an LLC is meant to create a legal barrier between your business and your personal assets and credit. If you haven’t formed an LLC yet, use our Form an LLC guide to get started.
An LLC doesn’t protect your business assets from lawsuits and liability– that’s where business insurance comes in. Business insurance helps protect your business from liability and risk.