Protecting Your Most Important Commodity

By: Amy Heim, Farm Insurance Agent

Choosing to be involved in agriculture, you are fully aware of why this industry ranks as one of the most hazardous. The list of hazards in agriculture is long….working with machinery and equipment, ATV’s and vehicles, livestock, exposure to chemicals, stresses of heat and cold, confined spaces (such as grain bins and manure pits), hearing loss….are just a few.  With the daily demands you face, the people you have working beside you (family members or employees) are a key component to making your operation work.  The safety and health of those that work with you is a priority.

In South Dakota, workers compensation coverage is not mandatory for farm or agricultural workers. This doesn’t mean you don’t need the coverage.  If you are diversifying your operation with any side business as most are, your need for workers compensation becomes even greater. Examples of side businesses include guided hunting, seed sales, grain cleaning, custom planting, harvesting, or spraying (just to name a few!).  If you have farm labor that participates in these businesses, these farm employees may not solely fall under the farm worker classification.  This leads to questions that should be asked, and answers that need to be understood.

Q: What is Workers Compensation?

A: Workers Compensation provides benefits to an employee for an injury or disease that occurs during the course of employment, including resulting disability and/or death. Employer’s Liability is also part of the coverage.

Q: What does Workers Compensation cover?

A:  In South Dakota, the minimum coverage requirement for employer liability is $100,000 for bodily injury by accident/$500,000 bodily injury by disease (policy limit)/$100,000 bodily injury by disease (each employee). You will often see these limits shown as 100/500/100. You can purchase higher limits of $500,000 and $1 million for a minimal additional premium.

Q: I have Farm Employer’s Liability on my farm policy and my employee has health insurance. Why do I need Workers Compensation?

A: Farm Employer’s Liability on the farm policy offers a dollar limit for an employee’s medical costs, resulting from an injury in which the farm employer is liable for.  Coverage is limited at $5,000-$10,000 with most farm policies.  Health insurance covers medical costs as well.  Neither covers resulting disability or death.  Workers compensation is broader coverage in that bodily injury by disease and/or injury is covered, as well as subsequent disability or death from that disease or injury (loss of limb, eyesight, etc.). With workers compensation, there is no dollar limit on medical costs, all reasonable and necessary treatment is covered.   Some health insurance policies may exclude work injuries.  Please check with your health carrier.

Q: How are Workers Compensation premiums determined?

A: Premiums are determined based on the # of employees and/or total payroll for employees in a certain classification, referred to as a class code. Grain operations will tend to have a lower premium than livestock operations due to the hazard of the work, for example.

The potential for fatal and non-fatal injuries on a farm or ranch is a daily reality. In seconds that reality can become a nightmare.  Your goal is to build a successful and profitable operation. Our goal at American Trust Insurance is to provide you the tools to protect what you have worked so hard to build.   For more information, call me today at our agency in Mellette at (605) 887-3900.