Midwesterners are used to sharing rural two lane highways with large farm equipment and tractor-trailers transporting crops and livestock. Despite the familiarity, traffic accidents involving passenger cars and farm equipment or tractor-trailers occur every year which are sometimes horrific. Liability from such accidents can literally force a farmer or rancher operation out of business if he or she has not taken the appropriate steps to protect itself from liability. The following is a list of five steps a farmer or rancher should consider to protect himself or herself from catostrophic liability.
1) Practice Due Diligence in Maintaining and Inspecting Equipment. The first step in preventing an accident is to make sure that the accident is not caused by the equipment. Records should be kept on all maintenance and or inspections to provide a paper trail that such maintenance and inspection occurred.
2) Establish a Comprehensive and Thorough Hiring Process. Generally, accidents are caused by lapses in judgment from the operater of the equipment or tractor-trailer. Therefore, it is imperative that the operator is qualified and responsible. A thorough application process and comprehensive background checks may prevent the hiring of somebody with a sketchy driving record and/or social or medical problem that impairs the individual’s ability to drive.
3) Ensure the Operation is Covered by Adequate Insurance. Establishing a close relationship with an insurance agent is imperative to ensuring that the operation has insurance necessary to protect the operation from the worst case scenarios that can occur when a passenger vehicle collides with farm equipment and/or a tractor-trailor. In addition the policy is the contract and therefore, should be read and understood. If you don’t understand a provision or exclusion make sure you ask.
4) Do Not Create Liablity through Contracts and/or Agreements. When leasing a tractor-trailer or a contractor to move crops, livestock or equipment, make sure the agreement does not place the liability for any accident on you. In the event that such agreement is necessary, make sure that the operations insurance will cover such liability.
5) Insulate the Operation through a Corporate Structure. An operation’s value is found in its assets, including the land, buildings, equipment and commodities such as the crop and/or livesock. Structuring the operation into a corporation can protect those assets from being seized as payment for any liablity in catastrophic accident. Furthermore, a corporate structure may also protect the owner from being personally liable for any damages.
These five steps have been proven to help prevent a horrific accident becoming catastrophic for a farming or livestock operation.