The Rural View – Agricultural Contractor’s Liability

Sheep need shearing, potatoes need planting and crops need spraying but, for many farmers they may not have the required resources to complete these tasks. Some look at investing in the latest technologies and machines, but this can be costly, and many don’t always want to have capital tied up in their assets. That’s why farmers are looking at Agricultural Contractors for their skills, expertise and machinery to carry out these vital tasks.

According to the National Association of Agricultural Contractors (NAAC) an estimated 91% of farmers use a contractor*. With high demand for contracting work it’s important Agricultural Contractors have the right insurance in place to provide their services to the agricultural community.

As a contractor, do you know what areas of cover you need to consider?

It’s essential you have the right liability insurance. Areas to think about include:

  • Public and product liability – to cover injury to a third party or damage to third party property arising from your work.
  • Employer’s liability – in case any of your employees sustain an injury at work that results in a claim against you
  • Tools and materials – in the event of theft or damage
  • Legal expenses – advice around tax and debt as well as cover for any legal costs

The importance of Public Liability cover

Andrew Spencer, our Farm Product Manager, strongly recommends you should never be without Public Liability (PL) cover. Imagine if you had an injury claim costing millions of pounds, how would you pay for it? Without PL cover, its more than likely that you’d have to sell your machinery, your farm and your possessions to pay for the damages awarded by the courts as part of the injury claim. Having Public Liability insurance pays any legal costs and compensation payments that you or your company could be liable for as a result of injury or damage to another person’s property. It’s not required by law but considering you will often be undertaking work on someone else’s farm and are likely to have tools and other equipment out that others could injure themselves on then it would be prudent to cover yourself in the event of an accident.

Why do I need Employers Liability insurance?

As an Agricultural Contracting business if you employ one or more than one person you will need this cover by law. If you’re a bona-fide sub-contractor (BFSCs) the work you do is carried out without the direction from the farmer and therefore you’ll need your own insurance and employers’ liability cover. Whereas if you’re a Labour-only sub-contractor (LOSCs) you may be classed as an employee as you’re working under the direction of the farmer and are likely to be using their tools and material to carry out the work. In this instance the farmer would need to ensure they had adequate EL cover.

Are all contracting activities covered?

As an agricultural contractor its more than likely that the types of services you provide vary from day to day. You may offer services including baling, fencing, harvesting, lambing, shearing and crop spraying. It’s important to make sure you let your insurance broker know what contracting services you undertake so they can get you the right insurance. At Rural we recognise that agricultural contractors may have more than one trade, so on top of the agricultural activities we provide cover for plumbing, building, electrics and similar activities.