Risk Management and Insurance

Find information, recommendations, and advice on risk management in farming. Topics covered include farm insurance, as well as crop insurance for fruits, vegetables, and field crops. Resources on understanding agricultural liability, health care options, and farm owner’s insurance are available.

Types of Farm Insurance

Insurance shifts some of the business risks to the insurance carrier, making it an integral part of the farm’s risk management strategy. There are different types of agriculture insurance to choose from, specially tailored to cover the business, as well as its employees, crops, and/or livestock. Insurance can also cover the operation's revenue.

As agribusiness insurance is often one of the farm’s top expenses, it’s advised to consult with an insurance professional to determine a well-fitting coverage. In general, when choosing a farm owner's insurance, the most appropriate policy will be based on factors such as the farm’s primary industry, livestock head number, buildings constructed, and the number of acres.

Farms with roadside markets that are in a permanent structure may further consider business owner's insurance. This provides protection against events that are not covered under the farm owner’s policy, such as damage to permanent signs, employee dishonesty, and theft or loss of money.

As farming is centered around food production, product liability insurance is worth considering, as well. The farm owner’s policy offers a limited amount of product liability insurance; however, certain production and marketing activities may require additional coverage. These activities include selling to restaurants, direct marketing of products in their natural state, and making and/or selling value-added products. In this section, find information and tips for proactive insurance management.

Crop Insurance

Crop insurance is a valuable farm risk management tool that covers losses caused by adverse weather conditions, pests, diseases, and price fluctuations. The Federal Crop Insurance Program is designed to provide a safety net for farmers and is available nationwide.

In Pennsylvania, crop insurance policies are available for at least one commodity in every county. Fruit crops covered include grapes, apples, pears, peaches, and nectarines. The main types of insurance for fruit growers are yield protection and whole-farm revenue protection.

Vegetable crops covered include potatoes, cabbage, green peas, green beans, sweet corn, and tomatoes. Producers can purchase three types of vegetable crop insurance – yield protection crop insurance, dollar value protection, and whole-farm revenue protection.

Field crop insurance policies in PA cover several different crops, including wheat, barley, corn, tobacco, and spring oats. Producers can choose from a wide range of insurance policies, such as yield protection coverage, revenue protection, and area risk protection.

Farm Risk Management

Managing risk is a core aspect of farming and a key component to the operation’s ongoing success. Various factors – including uncertainties like policy changes and unexpected events – can have a significant effect on farm income. By careful planning and choosing from alternatives, risk management strategies can help reduce financial losses.

The USDA Risk Management Checklist and User’s Guide can help both new and experienced farmers work through the risk management planning process. These tools further cover potential risk areas and offer research-based articles and resources. Learn more with Penn State Extension’s video series on assessing and managing risk.

In this section, gain access to educational resources on a wide array of topics, including preparing an emergency plan for livestock producers and developing a contingency plan for dairy farms. Existing and potential farmers who wish to discuss risk management planning and engage with other farmers can join the New Farmer Checklist and Chat webinar.