HO 24 73–ISO FARMERS PERSONAL LIABILITY ENDORSEMENT

(July 2020)

This form is used to add limited liability coverage for losses related to a farming operation. The endorsement meets this objective by modifying the homeowners declarations, definitions, Section II - Liability Coverages, and Section II – Exclusions.

Schedule

All farm premises must be listed in the schedule. They must be owned, rented, or operated by the named insured. A selection must be marked to indicate if operations are performed by the named insured or if listed premises are rented to others.

This part of the form contains identifying information for farm operations at the listed locations. This is also rating information. The form requires information in the following areas:

1. Farms Owned and Operated or Rented and Operated by You or Your Employees Location

This section applies to farm operations. The total acreage of the initial farm premises must be provided because that figure determines the premium for that location. If there are additional premium with buildings, that number of premises must be entered along with the rate that applies for the additional premises.

2. Farms Owned by You and Rented to Others

These farms are not operated by the named insureds. A charge is made for farm premises without buildings. Another charge is made based on the number of premises with buildings. The final charge is based on the total number of acres entered in this section.

3. Exceptions to Farming Business

The insured or applicant must include details on any other, non-farm business activity that takes place on any insured location. If information is not included in this section, coverage for the activity may be excluded.

4. Insured Farm Employees

Specific information must be provided for the maximum number of days an employee is employed at any one time during the policy period, or a total of person days worked. If applicable, a total payroll may be listed. Therefore, complete information must be supplied for full-time and part-time workers.

Farmers Personal Liability Approach to Definitions

In order to expand the basic policy’s coverage to protect an insured against farm-related liability, the form:

· Amends the definitions for “business” and “insured location.”

These revised definitions allow the amended policy to respond to certain farm-related losses because farming becomes an activity that is eligible for coverage. It also adds the farm location listed on this endorsement as an insured location and eliminates the limitation that vacant land cannot be farmland.

· Adds definitions for “farm employee,” “insured farm employee,” and “farming.”

The use of these additional defined terms helps create the parameters for providing optional coverage for certain farming activity and persons involved in farming (though a premium must be paid and information provided for farm employees). The form is intended to handle modest farm operations that contain few significant farm-related exposures.

Section II - Liability Coverages

The insuring agreements in this endorsement replace those in the standard policy. The only significant difference is the restriction that farm employees are not covered under medical payments coverage.

This endorsement provides protection under Coverage E - Personal Liability and Coverage F - Medical Payments to Others. Like the basic policy’s Section II coverage part, the form handles claims involving an insured’s legal responsibility for injury to other persons and for damage to property that belongs to others. Coverage is also available to handle the cost of defending an eligible insured in a court action.

Subject to the endorsement’s insurance limits, it will pay for the cost of a settlement or judgment, as well as any prejudgment interest. The policy will also pay for medical expenses for persons injured on the farm premises. Of course, this coverage is only for persons who do not belong to the insured’s household and are not employed in the residence or on the farm.

Example: Tritty Vegworth is her neighborhood’s premier gardener. The land surrounding her home is spread over three acres and her vegetable garden takes up nearly two acres. She grows so many vegetables that she is able to provide produce and sell fresh vegetable juices and sauces to several produce stands (which are owned by others). Tritty’s homeowners policy is endorsed with a Farmers Personal Liability Endorsement.

One day, several of her daughter’s friends come to visit. One little girl is hurt when she trips over a garden hoe and falls on a pile of canning jars. The jars were for canning some vegetables intended for one of the produce stands. The girl’s parents sue Tritty for the medical costs to treat her cuts. Tritty’s insurer will defend Tritty and handle any settlement (up to her policy limit) because the loss falls within the additional coverage of the farm endorsement. If Tritty did not have the endorsement, the loss would be excluded because it was related to a business.

Coverage also extends to injury involving animals that are owned or are in the care of an insured.

Section II – Exclusions

These exclusions replace those provided in the basic coverage form but are almost identical to them. The pollution exclusion is the only unique exclusion. The addition of farm employees to the residence employee exception is the other major change.

The Farmers Personal Liability endorsement, under Coverage E, Personal Liability and Coverage F, Medical Payments to Others, excludes “bodily injury” and “property damage” which involves:

A. Motor Vehicle Liability - damages related to the operation or use of motor vehicles or motorized property, including loading or unloading such property

Example: The brakes on a small pickup used by Jimmy's Juice Farm fail. The pickup rolls off a curb and smashes into a car owned by a person who parked to buy goods from their produce stand. When the customer sues for damages to her car, Jimmy's insurer declines the loss.

The exclusion is aimed primarily at vehicles that are not directly related to supporting farm activity on the insured location. Such exposures should be handled by auto (personal and commercial) policies. Exceptions do exist for certain incidents such as vehicles in dead storage, off-road use vehicles that are used in the farm operation or to maintain or service the residence, motorized property used by handicapped persons, some non-owned RV use and limited golf cart usage.

There is also an exception for on- and off-premise liability for use of battery-operated toy vehicles. They must not be capable of traveling faster than 5 mph (on level ground) and the exception only applies when operated by a child younger than seven.

B. Watercraft Liability - damages related to the operation or use of certain types of watercraft, including damage caused by the improper entrustment of such property, property used in competitions and any business use. However, similar to a standard homeowners policy, exceptions exist for craft in storage, craft of modest size and modest power, including sailing craft.

C. Aircraft Liability - damages related to the operation or use of aircraft, including loading or unloading aircraft as well as damages caused by the improper entrustment of such property

D. Hovercraft Liability - damages related to the operation or use of hovercraft, including loading or unloading hovercraft as well as damages caused by the improper entrustment of such property

E. Coverage E – Personal Liability and Coverage F – Medical Payments to Others

There is no coverage for any of the following:

1. An insured’s intentional actions except when such actions are protecting persons or property

Example: Larry and Betty run Larrabet's Fresh Vegetable stand in front of their home. The home's modest farm operation is insured by a HO 24 73 form. One day, an acquaintance visits the stand and demands a refund for some freshly canned green beans she bought from Betty. After getting a refund and giving back the canned beans, the customer yells at Betty for several minutes.

Scenario 1 - The customer suddenly stops yelling….because Betty smacks her in the head with one of the bean cans. The customer later sues Larry and Betty, but their insurer declines to defend or cover them when they discover that Betty hit the customer deliberately.

Scenario 2 - The customer suddenly stops yelling, but begins beating Betty, After several minutes of being attacked, Betty smacks the customer in the head with one of the bean cans. The customer later sues Larry and Betty. Their insurer defends them since Betty was fighting off an attack.

2. Business activities as described in the definition in this endorsement are excluded. This is identical to the standard homeowners business activity exclusion except farm premises rented to others are covered provided they are scheduled in the endorsement.

Note: The business definition has been modified to include a reference that includes home-sharing host activities. (02 17 Change).

3. Any type of professional service (therefore any action or failure to take action is excluded)

4. Damages occurring at a premises that doesn’t qualify as an insured location

5. Damages caused directly or indirectly by war or war-like circumstances

6. Any loss caused by pollutants

Note: There is no similar exclusion in the standard homeowners form.

7. An insured’s liability related to injury from communicable diseases

8. An insured’s liability related to injury from sexual molestation or any type of abuse

9. Damages involving the use of illegal substances or legal substances used improperly

Note: The vehicle, watercraft, aircraft, hovercraft liability and non-premises exclusions aren’t applicable to BI loss suffered by either a farm or a domestic employee, but only while performing their proper duties for the insured household.

F. Additional Exclusions Applying To Coverage E - Personal Liability

There is no coverage for any of the following:

1a. Liability losses created by any assessment charged against the named insured by an association, corporation, or community of property owners

1b. Liability loss due to any contract or agreement (with the exception of written contracts that are related to an insured location or liability assumption prior to a loss). Warranties of goods or products are an exception to this exclusion. This exception is only in this endorsement.

2. Involving “property damage” to an insured’s belongings. Any changes made to property by or at the direction of an insured to prevent injury are not covered.

3. “Property damage” to property rented to, occupied, or used by, or in the care of the "insured" unless caused by fire, smoke, or explosion

4. Involving “bodily injury" which either should or could be covered by any workers compensation or disability law

5. Involving any damage related to an insured liability that either is or should be covered under a nuclear energy liability policy

6. Bodily injury losses suffered by an “insured”

Note: The next three exclusions are unique to this endorsement.

7. Bodily injury losses sustained by any farm employee unless a premium charge is entered under item 4. on the schedule of this endorsement’s schedule

8. Property damage if it involves the insured’s completed work, products made, sold, or distributed by the insured,

9. Property damage when the loss is created by substances discharged from aircraft.

G. Additional Exclusions applying to Coverage F - Medical Payments To Others

There is no coverage for any of the following:

1. A "residence employee" if the "bodily injury" occurs when the employee is not on an insured location and it is not related to the employment

2. Injury which either should or could be covered by any workers compensation or disability law

3. Any damage related to an insured liability that either is or should be covered under a nuclear energy liability policy

4. Persons who live on an insured location. There are two exceptions. The first is residence employees. The second are farm employees but only if a premium charge is entered under item 4. on the schedule of this endorsement’s schedule.

5. To farm employees and others who are engaged in maintenance or farm operations at the location. There is an exception. This coverage part will provide coverage for a loss that occurs during a friendly exchange of services or chores.

Additional Conditions - Premium and Inspection Considerations

Often, the premium shown in the declarations is an advance premium, so it is considered to be a deposit. The final premium for the coverage depends upon additional information, so the insurer must reserve the right to make a proper determination. In light of this need, the endorsement allows for advance premiums to be treated as premium deposits that are contingent upon premium audits. Once the audit is performed, the policyholder will either pay an additional premium or receive a premium refund. The policyholder also has the responsibility to keep accurate records and to make any pertinent information available to the insurer.

Finally, the insurer reserves the right to inspect the insured property, but the purpose of any inspection is restricted to having relevance to providing the farm liability coverage.