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Agricultural Insurance

Farm/Ag Workers Compensation—Needed or Not?

Casey Roberts | August 19, 2019

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Farmer feeding calf

As I am privileged to travel around the United States to speak on various topics—some agricultural (ag) or farm-related and some not—I still remain surprised at the number of states that do not require farm/ag workers compensation for their states' agricultural and farm workers.

We constantly hear that farm/ag is among the most dangerous occupations that one could undertake (the others normally included in the same discussion are commercial fishing, logging/lumbering, and building trades), yet very few states require that the farm/ag workers in these various states be provided with this most basic of insurance coverages.

What the Data Shows

Data from the Bureau of Labor Statistics (BLS) (the reference for this point of our discussion) shows the fatality rate among "farmers, ranchers and agricultural managers" was 24.0 per 100,000 full-time equivalent workers. This is from a total of 5,147 fatal occupational injuries in 2017. The "all workers" fatality rate in the United States is 3.5 per 100,000 full-time equivalent workers.

Now, that is substantially less on a per 100,000 workers scale than the most dangerous occupation for that time frame—fishing and related workers with a fatality rate of 99.8 per 100,000 workers. However, it doesn't mean (at least not in my mind) that we should just be accepting of these numbers.

The data in 2015, according to the Bureau of Labor Statistics, shows that the number of fatal occupational injuries rose to 4,836 in the United States in 2015. Fatalities rose to 180 in that same year for agricultural workers, an overall increase of some 22 percent over the preceding year (148 deaths). 1

The number of fatalities in 2017 rose to 258 for this same segment, according to the BLS. So, despite an inability to attract workers to the farm/ag labor pool (a completely different topic), we continue to see an increase in the number of deaths in the farm/ag sector. Perhaps not surprisingly, in looking at the 2017 fatality number of 258—103 of those involved the most basic of farm implements: a farm tractor. NOTE: The BLS Census of Fatal Occupational Injuries (CFOI) is a cooperative effort of states and the federal government since 1992. To compile as comprehensive as possible an accurate list, it utilizes the following informational sources (not an all-inclusive list).

  • Death certificates
  • Workers compensation reports
  • Federal agency administrative reports
  • State agency administrative reports

States That Require Farm/Ag Workers Compensation

According to my research as of this writing, only 13 states require employers to provide workers compensation coverage for their agricultural workers, regardless of the number of farm/ag workers. Those states are Arizona, California, Colorado, Connecticut, Hawaii, Idaho, Massachusetts, Minnesota, Montana, New Hampshire, New Jersey, Ohio, and Oregon. Coverage is also required to be provided to those in the District of Columbia (yeah, I know, not a huge mecca of farming), Puerto Rico, and the US Virgin Islands.

States That Don't Require Farm/Ag Workers Compensation

Conversely, some 15 states do not require the providing of workers compensation for migrant, seasonal, or farm/ag workers. Included in this grouping are the following states: Alabama, Arkansas, Delaware, Georgia, Indiana, Kansas, Kentucky, Mississippi, Missouri, Nebraska, Nevada, North Dakota, South Carolina, Tennessee, and Texas.

In other states, coverage is limited to full-time workers, those employed in specialty jobs, those employed on larger farms and/or limited to the number of work hours, man-hours, number of full-time versus part-time workers, and the like. Those numbers are all over the board and are difficult to summarize in a discussion of limited scope. For those employers who hire temporary foreign workers under the H-2A temporary agricultural program are required to provide workers compensation coverage or its equivalent benefits to their workers.

Now, my writing is not intended as a screed upon the right thinking or wrongheadedness of providing or not providing workers compensation coverage to farm/ag employees—whether or not they be legally employed, full-time or part-time, or the multiple other considerations that go along with this type of employment. But I will state that I think that the states that require that workers compensation coverage be provided for all farm/ag workers have gotten it right!

Looking Back on Workers Compensation

Around the beginning of the 1900s, there was a significant amount of discussion and lawyering (as well as laws being passed and then subsequently declared unconstitutional in a number of states) regarding the requirement of workers compensation coverage for injured employees. The initial changes came in 1911 in Wisconsin, and then nine other states followed that same year. Mississippi became the last state to enact a law in 1948. Most of this (I am being as brief as possible here) was in response to multiple disasters in various states—not the least of which was the Triangle Shirtwaist Factory fire in New York City on March 25, 1911.

Among the initial reasons for passing legislation ordering the providing of workers compensation coverages, we find the following changes. 2

  • Provide prompt and sure payment of income and medical benefits to injured workers and their dependents
  • Provide a single remedy and reduce court delays
  • Eliminate payment of fees to lawyers and witnesses
  • Encourage employer interest in safety and rehabilitation
  • Promote a frank study of the causes of accidents
  • Relieve public and private charities of financially draining payments

One of the major trade-offs coming from the passage of these laws was to create a level playing field for ALL employers. Simply stated—if ALL employers in all similar types of businesses are required to carry workers compensation coverage, then each will equally share the burden of the expense and build that expense into the cost of their products.

Isn't There an Endorsement for That?

So what can a farm operator and/or their agent/broker do when they are not required to provide workers compensation coverages for their employees? Well, there's Insurance Services Office, Inc., endorsement FL 04 65 04 16, Farm Employers' Liability and Farm Employees' Medical Payments Insurance. From here on out, I'll just refer to it as the FL 04 65.

First a brief reminder: do not attempt to use this endorsement if your farm/ag operator is required to carry workers compensation. If they are required to provide the coverage, then that would be a statutory requirement, and the use of this endorsement would not meet that requirement. Workers compensation, when required, is intended to be the sole remedy for the injured worker. Accept no substitutes! Whether or not that is actually the case (being the sole remedy, that is) is a topic for another time.

The endorsement provides the following two separate coverages.

  1. Farm Employers' Liability
  2. Farm Employees' Medical Payments

We will look at these separately.

Farm Employers' Liability

This portion of the coverage has its own insuring agreement that states that the coverage will respond when the insured is "legally obligated to pay as damages because of bodily injury to which the insurance applies." The bodily injury (BI) has to be caused by an "occurrence" sustained by a "farm employee" and needs to "arise out of and in the course of the injured employee's employment by the insured." The injured employee must have been working for the insured at an insured location used for farming purposes.

Among the exclusions, we find that no coverage applies to or for the following.

  • BI the insured is obligated to pay by reason of the assumption of liability in a contract or agreement
  • BI sustained by a farm employee unless a written requirement is made within 36 months of the injury
  • BI sustained by an employee engaged in the operation or maintenance of an aircraft
  • BI to an injured employee if the employer is required to provide workers comp
  • BI to an employee employed in violation of the law with the knowledge or consent of the insured
  • Punitive or exemplary damages
  • BI to a spouse, parent, child, brother, or sister of a farm employee because of BI to the employee

The key thing to remember here is that the farm employer would need to be legally liable for this coverage to apply. No legal liability? No payment due.

Farm Employees' Medical Payment

This separate insuring agreement states that the insurer will pay "all reasonable medical expenses to which the insurance applies" for injury to a farm employee who sustains BI caused by an accident. Again, the injury "must arise out of and in the course of the injured employee's employment by the insured" and involve an insured location being used for farming purposes.

This section provides coverage regardless of fault and will pay for reasonable medical expenses incurred within 3 years of the date of the accident. There is also an option to include coverage for occurrences that involve motor vehicles, autos, or watercraft.

Definitions, Audits, and Limits

The coverage form provides for three additional definitions: farm employee, farming, and insured location.

  • "Farm employee" means any insured's employee whose duties are principally in connection with the maintenance or use of the "insured location" as a farm. That also includes the maintenance or use of the insured's farm equipment. It does not provide coverage, however, for employees engaged in any other pursuits other than farming.
  • "Farming" means the operation of an agricultural or aquacultural enterprise and includes the operation of roadside stands, on the farm premises, that are maintained solely for the sale of farm products produced principally by the insured. Of course, it does not include retail activity other than that described above or mechanized processing operations.
  • "Insured location" means the following.
    • The farm premises shown in the declarations
    • Premises used in conjunction with the farm premises
    • Vacant land owned or rented to an insured
    • Any part of a premises occasionally rented to an insured for farming purposes
    • Any farm premises acquired during the policy period

Premium is subject to audit or not depending on the selection provided for on the first page of the endorsement. The rate to be paid by the insured is determined by a "rate per $1,000 of payroll."

Specific employees can be named on the endorsement so that coverage would not apply to them. The endorsement can be used in conjunction with the "Farm Liability Coverage Form" as well as the commercial general liability insurance policy. A separate limit of coverage applies to the liability as well as the medical payments portion of the coverage.

Final Thoughts

Some states require farm/ag operators to carry workers compensation for injuries to their employees. Some do not. For those that have the requirement, the answer is simple: buy a workers compensation policy. For those where workers compensation is not required, they can elect to use the FL 04 65 endorsement. In many states, an insured can elect to provide workers compensation on a voluntary basis, even though it is not required to purchase the coverage.

My thought for those? Buy the coverage! It provides coverage regardless of fault. There's no need to prove liability; only prove that they were injured arising out of and in the course of their employment by the insured. It provides unlimited medical payments, significant loss of wages for the injured worker, and (in many situations) is still viewed as the "sole remedy" for the injured worker. In some states, we will see that the cost of the FL 04 65 can be similar to that of buying a workers compensation policy. Me? If I am asked, I say, "Buy the workers compensation!" It only makes sense.

Opinions expressed in Expert Commentary articles are those of the author and are not necessarily held by the author's employer or IRMI. Expert Commentary articles and other IRMI Online content do not purport to provide legal, accounting, or other professional advice or opinion. If such advice is needed, consult with your attorney, accountant, or other qualified adviser.


1 Bureau of Labor Statistics, US Department of Labor, National Census of Fatal Occupational Injuries in 2015, December 16, 2016.
2 US Chamber of Commerce, 2014 Analysis of Workers' Compensation Laws, (Washington, DC: US Chamber of Commerce, 2014).