4/7/2016
WHAT COULD GO WRONG?
Protecting Your Assets While Welcoming Customers to the Farm
Julie P. Bowling, Assistant General Counsel Tennessee Farmers Insurance Companies 931-388-7872 ext * 2291
[email protected]
WHAT COULD GO WRONG?
WHAT COULD GO WRONG?
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4/7/2016
AGRITOURISM IN TENNESSEE
Defined: means any activity carried out on a farm or ranch eligible for greenbelt classification under Tenn. Code Ann. Sec. 67-5-1001 et seq. that allows members of the general public, for recreational, entertainment or educational purposes to view or enjoy rural activities including farming, ranching, historic, cultural, harvest-your-own activities, or natural activities and attractions. An activity is an "agritourism activity" whether or not a participant provides compensation in money or other valuable compensation to participate in the activity. "Agritourism activity" includes an activity involving any animal exhibition at an agricultural fair, regardless of the location of the fair;
AGRITOURISM IN TENNESSEE
How to Protect your Assets
BUSINESS PLANNING!
What is the business? What activities will it engage in to make a profit? How is it organized? What are risks of the business, activities and organizational structure? How can the risks by mitigated?
Precautionary measures Insurance Self-insurance
May include farming and commercial activities, making it a hybrid activity for regulation, insurance, and liability concerns.
Potential Business Risks
Liability claims - Bodily injury/Property damage Employment claims – workplace injuries, employment practices Loss or damage to property from catastrophe Loss of key employees Business interruption/loss of income
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Best Practices for Agritourism Operations
Additional Agritourism Risks
Regulation
Is it a farm or another commercial operation? What regulatory regimes apply?
Potential nuisance claims Injuries or illnesses caused by animals Seasonal operations
Conduct a Cost-Benefit Analysis BEFORE starting the new activity.
Best Practices for Agritourism Operations
Consider what type(s) of policies are needed.
Beware concurrent coverage. Make sure all underlying policies are covered by the umbrella policy.
Consider who/what entity needs to be covered under the policy. Take precautionary measures required by insurance companies and consider precautionary measures for self-insured risks. Comply with the requirements for state law limited liability statutes.
Contact an insurance agent to get an estimate of the cost of insurance for the risks to be insured as part of this analysis. Insurance may not be available or affordable for certain risks. Make sure the coverage provides adequate protection.
Best Practices for Agritourism Operations Be an agritourism professional providing an agritourism activity Post and maintain warning signs in clearly visible location at entrance and every agritourism activity Signs must be printed in black letters at least 1 inch tall Include warning in contracts
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Best Practices for Agritourism Operations
COMPLIANCE WITH THE STATUTE IS NOT ENOUGH
Liability of an agritourism professional is not limited by the statute if the following situations cause damage, injury, or death to a participant:
You or employee commit an act or omission with reckless disregard, or without concern, for the safety of the participant You or employee knows about or should have known about a dangerous condition and didn’t share the information with participants You fail to train, improperly train or inadequately train your employees You or employee intentionally injures a participant You or employee commits an act or omission that is considered willful or wanton misconduct, gross negligence or criminal conduct
Review insurance coverages each year to make sure any new or expanded activities are covered under the policies in force. If a client is not sure something is covered, consult with the insurance company agent to make sure. Review safety and security measures each year.
Examples of Precautionary Measures
Safety and CPR training for staff. First aid station, kits. Process for handling injuries or security issues.
Simple form for witness statement/contact info Pictures
Specific measures for the activity – e.g. hand washing/sanitizing stations for petting zoos.
Handling Claims
Report the claim in accordance with the applicable insurance policy. Cooperate with the insurance company’s investigation in accordance with the policy. Is there a need for counsel?
Defense under reservation of rights.
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REGULATORY ISSUES FOR AGRITOURISM
Zoning Fire Codes Health department rules regarding food sales Food labeling rules Property taxation Employment law
HOLDINGS: SHORE V. MAPLE LANE FARMS
The Tennessee Right-to-Farm Law as written at the time of the case did not extend nuisance protections to all activities occurring on a farm.
The law was not as broad as that of other states and did not include “marketing” as a protected activity. The Court ruled that the law should be interpreted narrowly.
Amplified music concerts were entertainment and did not constitute recreational or educational activities on farm land exempt from local zoning resolution.
EXAMPLE: SHORE V. MAPLE LANE FARMS
411 S.W.3d (Tenn. 2013). Dispute with nearby property owner resulted in:
Regulatory proceedings re zoning of agritourism operation 7 years of ongoing litigation asserting that the operation constituted a nuisance.
TENNESSEE RIGHT TO FARM LAW – 2014 AMENDMENTS
The Tennessee Right-to-Farm Law now includes “marketing of farm products in conjunction with the production of farm products thereof” in the definition of farm operation. Tenn. Code Ann. Sec. 43—26-104 also states that the law is to be broadly construed to effectuate its purposes.
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TENNESSEE DEFINITION OF AGRICULTURE – 2014 AMENDMENTS
Tenn. Code Ann. Sec.43-1-113 now defines agriculture to include “entertainment activities conducted in conjunction with, but secondary to, commercial production of farm products and nursery stock, when such activities occur on land used for the commercial production of farm products and nursery stock.”
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