Written by Doug Van Batavia, PayneWest Insurance
Almost all dairy operations I come across are good stewards of the land. Dairy farmers intrinsically care for your cows and your land in a manner that ensures the health and safety of your family, employees and neighbors. Unfortunately, across the country environmental damage claims made on farm operations are on the rise. The increase in environmental litigation has opened dairies particularly to heightened risk. For dairy farmers to stay viable and provide a defense mechanism against potential lawsuits brought on by environmental groups/anti-dairy activists, it’s important to be proactive when understanding and determining your pollution coverage.
Most farm insurance policies come with a pollution coverage endorsement that often ranges from $100,000 – 200,000 in liability coverage, but for many dairy operations the endorsement coverage may not be enough to protect against a potential lawsuit. These endorsements tend to exclude claims of pollution caused by manure. Claims of environmental contamination to groundwater and waterways from manure waste are, however, the most prevalent, so your endorsement may provide little to no protection if a suit is brought against you. And if it does cover you, the coverage amount may only cover a fraction of attorney costs and no mitigation costs. Adding stand-alone pollution liability coverage may help protect these holes in your farm policy.
Pollution coverage considerations
Stand-alone pollution policies can offer you increased coverage for mitigation costs, attorney fees and possible fines. When considering coverage limits, there are several factors that will help you and your insurance agent determine a policy you can be comfortable with:
- Size of your herd
- Location, or the proximity of your operation to neighbors and urban areas
- Geographic proximity to irrigation and waterways
- Density of dairies in your area
- Level of environmental litigation in your county or nearby urban areas
Depending on these factors and the possibility of various scenarios, you may be of increased risk of litigation. For example, do you have a fruit tree farm down the road from you that irrigates with water that could potentially become contaminated from your operation? Are you located near several other dairies that environmental groups could target in a single lawsuit?
Best practices for pollution control
Fortunately, the Natural Resource Conservation Service (NRCS) field offices provide a road map to best practices when it comes to pollution mitigation control. The guidance from Idaho’s OnePlan, the multi-agency project that combines government regulations for agriculture, simplifies the best management practices dairies must follow to comply with nutrient and waste management regulations (federal, state and local) as well as other ag practices.
Several dairies are also getting creative with their manure management. A key fertilizer in organic and sustainable soil management, some dairies are hauling their manure to neighboring organic farms or packaging and selling for the hobby farmer or gardener.
Being proactive across your operations by following industry best practices and regulations, employing creative solutions and ensuring that your operation is covered to protect you from your greatest risks will help you set your dairy up for success for years to come.
Doug Van Batavia is a risk manager and insurance broker at PayneWest Insurance. As a former dairy owner, Doug provides firsthand entrepreneurial and agriculture experience to customers throughout the Northwest. This content is for informational purposes only. Consult your actual insurance policy for details regarding terms, conditions, coverage, and exclusions. Contact Doug at firstname.lastname@example.org or 509.946.2629.