Insuring Farmers for Environmental Damage Claims

Environmental impairment loss exposures are inherent in the operation of a farm, and these loss exposures cannot be avoided in the business of farming. Recent court rulings have shown that farmers face pollution-related loss exposures, most notably from drinking water supply contamination and odors. On top of that, farm package insurance programs commonly sold to farmers do not provide any effective coverage for claims arising from gradual contamination of soil and water or from odors.

Insuring Farmers for Environmental Damage Claims

Increasing Litigation

Across the country, lawsuits are increasing along with the growing size of farming operations. The alleged damages being sought by the plaintiffs in some of these lawsuits are in amounts never seen in the agricultural economy.

In a recent example of surprising environmental damage claims being made in farming country, the city of Des Moines, Iowa, sued the County Board of Supervisors in three counties northwest of the city for over $180 million. The city did so to recover its anticipated costs to construct and operate a new water treatment plant needed to treat the drinking water supply serving over 600,000 residents. The cost to build and operate the water treatment plant was estimated to be as high as $183,500,000.

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“the good news is that specialized environmental impairment insurance for farms is available through thousands of insurance agents and brokers across the nation..”

By: David Dybdahl

Coauthor Aaron Millonzi