What You Need to Know About Farmers Market Insurance

Farmers Markets are becoming more popular. The USDA estimates that there will be approximately 7,175 farmers markets in 2010. Farmers market managers and associations are insisting that all market participants have commercial general liability insurance policies. Farmers market vendors and managers don’t understand the terminology of the insurance industry, as not all insurance companies are specialists in this coverage.

Basic market insurance policies are designed to provide broad coverage to protect vendors and market participants from lawsuits. Liability coverage is the main component of a short-term policy. This type of insurance covers damages to personal property or injuries. To protect the vendor or organizer from any claims that may arise out of the operation of the market, additional insureds can be added to the policies.

In the event of an injury to an attendee from the vendor’s products or display, liability insurance policies will cover the market and vendor.

Question – Is my property protected by a general liability insurance policy?

Answer The general liability policy does not cover property you rent, borrow or own. This exclusion is because you may have property that falls within this category. Separate property policies are available to protect such exposures.

Question What property is covered by the general liability?

Ex. A patron who falls on an extension cord that you had improperly laid at your event and causes damage to his clothes. The general liability policy would cover the damages to the clothing because it was not your property, rented, borrowed, or in your possession at the time.


Answer toNo. They would still require their own insurance to ensure that they are properly protected. Another misconception about additional insureds is that they do not need to purchase their own insurance if they are added as an insured to a policy. An additional insured is only protected if they aren’t responsible for the claim. If they were responsible for a claim, they would not receive coverage under your policy.

This is because the reasoning behind it is simple. Your own insurance should cover you if you are responsible for a claim. This includes coverage for additional insureds. Additional insureds would need to have their own coverage if they are responsible. Both you and the other insured are jointly responsible for the same claim. Each would need to have their own insurance.

Example 1 You are a vendor at the Great Pumpkin Farmer’s Market and have added Great Pumpkin to your vendor agreement as an additional insured. Great Pumpkin is not responsible if a patron falls on your booth, and files suit against you. Your policy would cover Great Pumpkin and you.

Example 2: Same scenario as above. Instead of falling on your booth, the patron slips and falls in an area nearby, such as an aisle. Great Pumpkin and you are both sued by the customer. Your policy would cover you but not Great Pumpkin. They would need to have their own insurance.

Question – What are Occurrence and Aggregate Limits for?

Answer The Occurrence Limit is the maximum amount an insurance company will pay for each incident, regardless how many people are injured (claimants).

An aggregate is the same thing as a cap. It is the sum of all the claims that are made during your policy term, regardless of how many of them were separate.

Example: Your policy has an aggregate limit of $1,000,000 There are 3 claims against you during the term of your policy. On one claim, $250,000 was paid, $500,000 was given on the second, and $300,000.000 was given on the third. The total amount was $1,050,000. The total amount paid by the insurance company is $1,000,000 (Aggregate maximum policy limit). The balance would be paid by you at $50,000.

What is Products Liability Insurance?

Answer:Products Liability (including completed operations), insurance protects you from injury to the public resulting from defective products you sell, manufacture, or give away.

Many general liability policies provide coverage for products liability/completed operation. We may not be able to cover your products if they are hazardous, such as tobacco or cosmetics.

Here are some examples of product liability claims.

Example 1 : A customer buys a souvenir shirt from a vendor at a market. The shirt was not properly labeled and had fabric that the spectator was allergic. The vendor would be covered for any claims resulting from the product liability insurance.

Example 2 A food vendor selling chicken dishes incorrectly prepares the food, causing bacteria to grow. Some customers are subsequently exposed to food poisoning. For any claims resulting from this, the food vendor would be covered by products liability insurance.

Short term insurance policies also offer coverage for medical expenses for anyone who is injured by an exhibitor at a special event. This covers all regardless of whether or not the policy holder is liable. You can also include coverage for vehicles used during the event.

Insurance policies for short term are different from one company to the next. You should always speak to your agent to fully understand what the policy covers.