Product Liability Insurance Q & A

Hi Tom,

I got your name off the internet at the MFFM website. I am a farmer and I currently sell at a local market. The question on “product liability insurance” has come up and it looks grim for the small farmer (once again!). The market master has come to the conclusion that we will all have to have the insurance in order to sell at the market. It is his understanding that we will need the insurance to sell anything that is edible including fresh vegetables. This may eliminate 4 or five vendors. I am wondering what your experience with this problem is. Have you seen markets buy this insurance as a blanket coverage? I know you are very busy this time of year so I am sending along an envelope with my address and I would appreciate it if you could comment on this. I am also interested in your newsletter if you still print one. Thanks, Ann

Hi Ann,

“Product liability” insurance is purchased by each individual vendor, rather than by the whole market. “Commercial General Liability” insurance is often purchased by a market as a whole to protect one vendor from suits against another, since they are both in the same organization. Many market have this latter type, costing around $250 from Farm Family, for example.

Most markets do not require members to purchase product liabilty, or any other type of insurance, although some do. Many market members have purchased it for their own protection, but many have not. Those who have it are usually either larger farms or those who sell processed or high risk items like breads, jams, poultry, dairy, meats, etc. In other words, those who have it are generally those who are less casual about their operation and who see it as another cost of doing business along with their other licenses and fees. Often it is included in regular insurance for the farm, and the cost is based on “exposure”, or the calculated likelihood of a problem as figured by the insurance company.

Many homeowner insurance policies allow for the inclusion of a “rider” for product liability for, say, selling cukes in a wheelbarrow at the end of the driveway. Many small growers of produce can use this because they are are at about that scale.

In any case, it wouldn’t hurt to talk to several insurance agents about it, including, but not limited to, the agent who issued your homeowner’s policy. Many agents have no clue about what attending a farmers’ market entails, thus are unlikely to quote a good rate. Often a rider on an existing policy is far less expensive than a whole new policy. The important thing is to look around for the best quote.

In any case, since the market members should be in charge of their own market, perhaps the market master could be outvoted if there are sufficient number of members who feel this requirement would be a burden. Perhaps the market needs a new market master — a person more in tune with the needs and wishes of the members rather than a warped sense of “professionalism” that cripples the market by erecting barriers to potential members. If that is not possible, perhaps you and the other 4-5 vendors could create your own market. P.I. is a pretty big place, after all.

Also see the article Dependent vs. Independent markets.

There is no state law regarding insurance being purchased by market members, although some insurers of the whole farmers’ market may require each member also have insurance.

Hope all of this is of some help. Email me at any time at tom@snakeroot.net

Tom Roberts

About Tom Roberts

When I started attending the Brewer Farmers’ Market back in August of 1983, my sole concern was being able to sell the produce my farm was growing at a good price. After attending market for a year or two, I began to realize that how the market was organized had a great impact on my sales. And how the market was organized also influenced how it made decisions about dues, new members, what could be sold at market, and how it promoted itself—and this, too, had an impact on my sales. So I got involved in the market’s steering committee and began to understand how various market members thought the market should operate. Some wanted a market czar, some wanted everyone to be allowed to do their own thing. But everyone seemed to agree that if the market as a whole did well, then so did they.