One of Michael Splane’s farm insurance clients was recently sued for half a million dollars after a farmstand customer tripped on a step and broke an ankle. Another client was sued for the same amount over a loose horse that cracked a passing driver’s passenger mirror. Both settled for $250,000.
Splane said liability lawsuits like these against Maine farmers and homesteaders are happening more often, especially for injury and sickness, and are getting more expensive.
Splane, who grew up in Bangor, said the culture in Maine has always been more laid back than in more populated areas.
“We never thought we had to worry about the risks of having a yard sale,” he said.
Maine business owners don’t have to carry property or liability insurance, though they can be liable if their livestock get loose, visitors get hurt or customers get sick after eating food from their roadside stands.
Many small operations see the risk as worth taking. Others aren’t sure if they need insurance, can’t afford it or can’t get their aging buildings covered.
But as the agricultural landscape changes across the state, insurance could become more important even for small homesteaders, insurers said — especially those doing business under their own names rather than a business entity, meaning they’re personally liable if someone sues them.
Fern Axelson, a Midcoast homesteader, is thinking about insuring her roadside egg stand. She has three goats and 25 chickens, and said she worries coverage would cost more than any profits. At most, Axelson thinks it’ll bring in $50 a week.
She hasn’t been in Maine for long, and said she’s not sure if insurance is something she needs here. Axelson is also unsure if there could be programs helping people get insurance on their farms.
“Coming from a large city lacking the kind people we encounter everywhere here in Maine I’m torn on what is reasonable here or not,” she said.
When she turned to social media for advice, comments were mostly negative. One said it would be impossible to trace illness to one egg stand. A second believes Maine’s Food Sovereignty Act would protect them. Another said most people just don’t insure their small stands.
If they do, farm policies are similar to homeowner’s insurance plus liability protection, and are specialized to cover livestock, equipment, buildings and farm stands. For farms less than a hundred acres, it could run several thousand dollars a year, though the specialized nature of the policies means costs vary.
In Maine, these policies cover thousand-acre potato farms down to home operations with just a few animals and small sales, said Liam Hughes, who sells farm insurance across the state for Presque-Isle based F.A. Peabody. He’s in the process of insuring a homesteader’s new yurt, for example.
If a homesteader starts selling at farmers markets, the liability insurance will follow them there.
Having one farm policy is a safer bet than piecing together policies for different parts of your operation, said Splane, who is based in Windham and insures 250 clients.
Parts of different policies will likely overlap, and if a claim is filed, the different insurers may disagree over who should pay it, which sometimes means no one will.
There isn’t data to prove it, but he thinks an increasing post-pandemic number of wealthy homesteaders and hobby farmers are seen as a source of money for lawsuits. Splane has a number of customers with cash moving in from out of state to try farming.
“Those are my new clients,” he said.
Hughes also warns homesteaders and small farmers about operating as sole proprietors instead of a separate LLC or corporation, opening themselves up to personal liability. That means all your personal assets are “up for grabs” if a lawsuit happens, he said.
There are challenges in getting a homestead insured.
Maine’s farm buildings are aging, for one. That’s been a problem for Hughes’ farmer and homesteader clients.
Data isn’t collected for farm outbuildings, but more than a third of Maine homes were built before 1960, compared to 27 percent in the country overall.
PFAS, or “forever chemicals,” in soil can also limit what coverage landowners get.
Splane recommends buyers have core samples of soil taken throughout a property, even parts they don’t have plans to farm on. If they expand and find PFAS in their soil, insurance won’t cover it.
A third challenge is coming home to roost for Maine farmers: increasing claims from extreme weather.
Homeowner’s insurance was barely profitable last year for the first time following weather damage claims across the country. Higher costs are likely to reach consumers, and the weather patterns are overwhelming the property insurance industry, Splane said.
Sometimes the weather causes unusual problems for farmers, too — a client’s horse barn flipped over in the wind last winter.
Aside from liability and property coverage, farmers can insure crops such as blueberries, apples, potatoes, corn and grains, dairy, swine and overall farm revenue through the U.S. Department of Agriculture.
Non-insurable crops that are lost to natural disasters can be eligible for the department’s disaster assistance program. A “micro farm” program insures revenue for farms bringing in less than $350,000 annually.
Agritourism sites can also reduce liability by posting warning signs about risky areas or requiring waivers.
Because there’s only so much insurance can do, Splane recommends farmers join advocacy groups like the Maine Organic Farmers and Gardeners Association or the Maine Farm Bureau, which can take up causes for growers like MOFGA is currently doing with PFAS.
“Having those groups on your side will be absolutely paramount,” he said.
