Wheaton, Ill., Oct. 14, 2008—A national insurance advisory organization is preparing a countrywide filing of the property/casualty industry's first standardized general liability program specifically designed for farms and agribusinesses.

The American Association of Insurance Services (AAIS) will soon initiate a countrywide filing of its new Agricultural General Liability (AgGL) Program, which will consist of two base forms, numerous endorsements, plus a program manual with rules, agricultural rating classifications, and loss cost rating information.

In an interview posted online at www.AAISonline.com, Sherry Taylor, AAIS manager of farm and agribusiness, says: "It is time for a program that provides tools for covering and rating liability for a broad range of operations, much as you see in a standard CGL program, but with policy forms and risk classifications specifically designed for agricultural enterprises."

Taylor will be a presenter, along with Deborah Summerlin, AAIS vice president of insurance lines, of a web seminar describing the AgGL scheduled for 10 a.m. Central time on Nov. 13. To register, go to www.AAISonline.com. (Participation is generally reserved to staff from AAIS member companies, but individuals interested in affiliating with AAIS can request permission to participate.)

The AgGL's approach to covering agricultural liability is embodied in the choice it provides between two base forms:

·        The Farm Commercial Liability Form limits coverage to farming and certain related operations, but allows coverage for additional exposures to be added by endorsement or dec page entry.

·        The Agribusiness Commercial General Liability Form functions like a traditional CGL policy in that it automatically provides coverage for all operations of an insured except those explicitly excluded.

Both forms include a built-in coverage for “Farm Chemicals Limited Liability” (chemical drift), plus an option to provide personal liability coverage by endorsement, among other endorsement options.

Both forms also include an extensive and up-to-date series of exclusions, including exclusions unique to agriculture that address liability from certain logging or lumbering operations, the Migrant and Seasonal Agricultural Worker Protection Act, and animal diseases.

The two forms differ in their approach to “agritainment” and custom farming.

The Farm Commercial Liability Form excludes coverage for educational and recreational activities undertaken for compensation, but coverage can be added by identifying such activities on the declarations. Under the Agribusiness Commercial General Liability Form, there is no restriction of coverage for such activities, as they are not differentiated from other covered activities, but coverage can be excluded by endorsement.

Custom farming is specifically defined and insured under the Farm Commercial Liability Form, provided receipts from such operations do not exceed an established threshold. Under the Agribusiness Commercial General Liability Form, there is no definition or exclusion for custom farming; it is another insured activity unless explicitly excluded.

"Compared to standard farmowners programs, the AgGL provides broader coverage in its base forms with a wider range of endorsements for covering or excluding liability exposures," says Taylor. "Compared to standard CGL programs, the AgGL includes a number of agriculture-specific provisions in its forms, as well as more agricultural classifications than typically found in a CGL manual."

For information on affiliating with AAIS for use of the Agricultural General Liability Program, contact Rick Maka, director of marketing, at rickm@AAISonline.com or by calling 800-564-AAIS.