Reviewing Your Liability Insurance Policy

This article was first published in the  Progressive Cattle Magazine.


One of the first steps anyone owning or leasing land should take is securing adequate liability insurance. Liability insurance offers critical protection in the event someone is injured on the insured’s property.

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Liability insurance offers two key benefits to the insured. First, it provides coverage up to the policy limits that will be paid out in the event a covered claim occurs. Second, it provides a defense to the landowner in the event a covered claim is filed. For example, if someone is injured and files suit against the landowner of the property where the injury occurred, the landowner’s insurance company would step in and hire an attorney, at the insurer’s expense, to represent and defend the landowner.

Given the potential of a landowner being named in a lawsuit if someone is injured on his or her land, this is extremely important and can avoid the landowner owing extensive legal expenses out of pocket.

Landowners should carefully evaluate their policy and review the following.

Does the policy correctly identify the property and the owners?

Be sure the policy correctly lists the property and the owners. Ensure legal descriptions and the number of acres listed are accurate. Also ensure the policy names the actual landowner. For example, if “ABC Cattle LLC” owns the property, but the policy is written in the name of one of the members, this would need to be remedied and the LLC be listed as the owner. Additional parties may also seek to be included as “additional insureds” if necessary.

Does the policy cover every activity taking place on the property?

Another critical step is ensuring every activity the landowner is undertaking falls within the parameters of the policy’s coverage. I’ve recently seen two situations where rural landowners had homeowner’s policies that included liability coverage. But when they had livestock get out and hit on the roadway, they learned their homeowner’s liability policy did not cover livestock collisions.

They could easily have added this type of coverage for a minimal yearly cost, but they did not realize they needed to do so. Take a moment to consider all of the activities on your property – are there recreational activities, direct sales, agritourism events? Be sure each of these activities are included on your policy. Oftentimes, it can be as simple as adding an endorsement to the policy to provide for additional covered activities.

Does the policy provide a sufficient coverage amount?

There is no magic amount of coverage that is one-size-fits-all for cattle producers. Each producer should consult with his or her insurance agent to determine their potential level of risk. For example, someone who has a pasture where hunters are not allowed, with good fences, several miles from any highways likely needs to carry a lower policy limit than someone who runs a petting zoo or has cows bordering a major interstate. One other consideration for landowners to keep in mind is: There may be statutory benefits to carrying a certain level of insurance. In Texas, for example, our Recreational Use State provides added benefits if a landowner carries the amount of insurance listed within the statute.

What caps or exclusions exist?

Landowners should carefully evaluate their insurance policies to determine if there are any caps on damages or exclusions that would affect their operation. For example, it is fairly common to see limitations on damages for chemical drift. Some policies may cap coverage at a certain dollar amount, while others may provide coverage for ground application but exclude aerial pesticide application. Understanding these exclusions and ensuring they are not an issue is critical to ensuring adequate protection.

By taking time to review a liability insurance policy and ensure it provides adequate coverage, landowners are taking an important step in protecting not only their operation but the legacy they likely hope to leave behind.

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