Rising Agritourism Boosts Insurance Needs: Navigating Increased Risks for On-Farm Entertainment Ventures

By Allen Laman

As farmers adapt to the challenges posed by volatile markets and unpredictable weather, a notable trend has emerged: the rise in demand for agritourism insurance. An agribusiness insurance leader recently shared with Insurance Journal that there has been “meaningful growth” in this sector.

From farm stays to pick-your-own-produce experiences, the USDA’s Census of Agriculture reported that U.S. farms and ranches generated approximately $1.26 billion from agritourism services in 2022. After adjusting for inflation, this figure represents a 12.4% increase since 2017. Impressively, around 57% of U.S. counties reported some form of agritourism income.

When a farm ventures into agritourism, it’s crucial to review and expand insurance coverage. Jeremy Staun, vice president of farm sales and underwriting at Nationwide, noted that while these initiatives may start slowly, they can quickly grow, along with their associated risks.

“Across the country, I’d say we’re seeing a noticeable uptick in farmers turning to agritourism for something to stabilize their revenue strategy,” Staun remarked, especially in light of current economic pressures.

Nationwide has approximately a billion dollars in premiums within its farm and ranch portfolio. Staun anticipates that the U.S. agritourism market will grow by more than 10% annually over the next five years, reflecting the experiences of agents and clients alike.

What types of agritourism offerings are gaining traction? Some of the fastest-growing segments tracked by Nationwide fall under outdoor recreation. Staun elaborated, “That would be things like sunflower trails, orchards, and interactive farm operations and experiences.” Additionally, farm-to-table educational experiences are becoming increasingly popular, as consumers seek to understand the origins of their food and the principles of sustainability.

Given the added risks associated with these offerings, it’s no surprise that most agritourism operations require specialized agritourism or farm liability enhancements layered onto their standard farm policies.

When farmers invite visitors for festivals, workshops, and other on-farm experiences, the insurance exposures multiply. Staun highlighted potential increases in premises liability losses, animal contact incidents, and weather-related property risks linked to temporary event structures and equipment.

“Some of the commonly overlooked exposures we see in this space include parking lot liability, temporary structures like tents or stages, and volunteers who aren’t always considered in risk planning,” he added.

In a separate interview, Richard Bryant, chief underwriting officer of Prime Insurance Company, expressed uncertainty about whether most agritourism operations are adequately insured. He noted a common naivety among operators when purchasing agritourism insurance.

Farmers typically buy cost-effective insurance through farm mutual insurance companies, but Bryant emphasized the need for expertise in this area to effectively manage the inevitable losses that arise.

“It’s just a question of how big those losses are going to be,” he stated. “Somebody’s going to slip and fall. Somebody’s going to fall off a hay bale. Somebody’s going to go home with a pathogen or an allegation of one.”

From a market perspective, Staun noted that the rapid expansion of agritourism is creating new opportunities for insurers to innovate. However, he also pointed out that markets are becoming more disciplined in their underwriting practices.

Carriers are tightening terms around high-risk activities, including coverages for inflatables, motorized attractions, alcohol-related events, and weather-exposed structures. “You’re seeing a lot of that tightening in that space as agritourism opportunities expand,” Staun remarked.

Despite these changes, he emphasized that the appetite for well-managed operations remains strong. Farms that invest in safety protocols, signage, and organized event planning continue to have access to broad and competitive coverage. Staun encouraged agents and brokers to carefully consider the exposures their clients’ agritourism operations may present.

“And really think about the claims,” he advised. “Because that’s the bottom line. What type of claims or exposure could come from the realities of welcoming the public into a farm environment?”

Topics
Trends
Agribusiness

By Allen Laman

As farmers adapt to the challenges posed by volatile markets and unpredictable weather, a notable trend has emerged: the rise in demand for agritourism insurance. An agribusiness insurance leader recently shared with Insurance Journal that there has been “meaningful growth” in this sector.

From farm stays to pick-your-own-produce experiences, the USDA’s Census of Agriculture reported that U.S. farms and ranches generated approximately $1.26 billion from agritourism services in 2022. After adjusting for inflation, this figure represents a 12.4% increase since 2017. Impressively, around 57% of U.S. counties reported some form of agritourism income.

When a farm ventures into agritourism, it’s crucial to review and expand insurance coverage. Jeremy Staun, vice president of farm sales and underwriting at Nationwide, noted that while these initiatives may start slowly, they can quickly grow, along with their associated risks.

“Across the country, I’d say we’re seeing a noticeable uptick in farmers turning to agritourism for something to stabilize their revenue strategy,” Staun remarked, especially in light of current economic pressures.

Nationwide has approximately a billion dollars in premiums within its farm and ranch portfolio. Staun anticipates that the U.S. agritourism market will grow by more than 10% annually over the next five years, reflecting the experiences of agents and clients alike.

What types of agritourism offerings are gaining traction? Some of the fastest-growing segments tracked by Nationwide fall under outdoor recreation. Staun elaborated, “That would be things like sunflower trails, orchards, and interactive farm operations and experiences.” Additionally, farm-to-table educational experiences are becoming increasingly popular, as consumers seek to understand the origins of their food and the principles of sustainability.

Given the added risks associated with these offerings, it’s no surprise that most agritourism operations require specialized agritourism or farm liability enhancements layered onto their standard farm policies.

When farmers invite visitors for festivals, workshops, and other on-farm experiences, the insurance exposures multiply. Staun highlighted potential increases in premises liability losses, animal contact incidents, and weather-related property risks linked to temporary event structures and equipment.

“Some of the commonly overlooked exposures we see in this space include parking lot liability, temporary structures like tents or stages, and volunteers who aren’t always considered in risk planning,” he added.

In a separate interview, Richard Bryant, chief underwriting officer of Prime Insurance Company, expressed uncertainty about whether most agritourism operations are adequately insured. He noted a common naivety among operators when purchasing agritourism insurance.

Farmers typically buy cost-effective insurance through farm mutual insurance companies, but Bryant emphasized the need for expertise in this area to effectively manage the inevitable losses that arise.

“It’s just a question of how big those losses are going to be,” he stated. “Somebody’s going to slip and fall. Somebody’s going to fall off a hay bale. Somebody’s going to go home with a pathogen or an allegation of one.”

From a market perspective, Staun noted that the rapid expansion of agritourism is creating new opportunities for insurers to innovate. However, he also pointed out that markets are becoming more disciplined in their underwriting practices.

Carriers are tightening terms around high-risk activities, including coverages for inflatables, motorized attractions, alcohol-related events, and weather-exposed structures. “You’re seeing a lot of that tightening in that space as agritourism opportunities expand,” Staun remarked.

Despite these changes, he emphasized that the appetite for well-managed operations remains strong. Farms that invest in safety protocols, signage, and organized event planning continue to have access to broad and competitive coverage. Staun encouraged agents and brokers to carefully consider the exposures their clients’ agritourism operations may present.

“And really think about the claims,” he advised. “Because that’s the bottom line. What type of claims or exposure could come from the realities of welcoming the public into a farm environment?”

Topics
Trends
Agribusiness