On Thursday, August 24, Matt Ludwig and I left Blacksburg and headed to Harrisonburg to interview Garnett Brockman, an experienced insurance agent with Virginia Farm Bureau Insurance. Garnett works out of the Luray office, focusing on ag and production-related policies. He was kind enough to walk us through the insurance considerations involved in marketing products directly to restaurants.
Most products sold to restaurants are covered under product liability policies, although the type of policy may vary somewhat with the product or product form. The amount of coverage necessary is determined by the amount of assets you’re trying to protect. Any farm insurance agent should be able to advise you on what specific policy you might need.
So how does the claims process work? If there’s a food safety outbreak at a restaurant you supply in which damages are claimed, the restaurant is going to audit their product chain to figure out where things went wrong. If it wasn’t your product, don’t worry about it. If it was your product, call your farm insurance agent and they’ll settle the damages under your policy. Don’t have insurance? Garnett recommends you get a good lawyer.
This underscores a great point about insurance. While liability insurance isn’t typically prohibitively expensive, many people view it as an unnecessary expense, or even a nuisance. Many people think that just because they’re good farmers, they’ll never have an outbreak. They may never have an outbreak, and one hopes they never will, but if an outbreak gets traced back to them and they’re uninsured, they can lose their farm. Protection from the possibility of such an outcome is more than worth it, and in many cases it’s simply the cost of doing business.
At the end of the day, insurance is just another risk management tool, no different from hedging or pricing contracts or any of the other devices farmers use to mitigate risk. Garnett and folks like him across Virginia and the US help keep farms safe enough to pass from generation, and safe enough to start in the first place To learn all you need to know and get an idea of all the questions you should be asking your insurance agent, be sure to watch Garnett’s interview on the Virginia Market Ready YouTube Channel. Thanks again to Garnett for sharing his time and wisdom with us.
Ben Garber (Virginia Tech Ag Econ ‘19)
September 1, 2017