Liability coverage for chemical drift
Protecting your vineyard from damaging pests and grapevine diseases with pesticides may be an essential part of your vineyard management. Keeping these chemicals on your property can be challenging even if you have followed all the required procedures. Nationwide, the EPA estimates up to 70 million pounds of pesticides valued up to $640 million are lost to drift each year. Drift is the movement of chemicals off your vineyard, through the air away from the intended target, and can be in the form of liquid droplets, vapors, and particles. You have reason to want to limit drift simply because of the economic consequences, and these chemicals are too expensive to just blow in the wind. Furthermore, drift that damages a neighbor’s property may lead to litigation. In certain instances, liability insurance specifically designed for chemical spray drift may allow you to mitigate this risk.
You have seen examples of herbicide and pesticide drift from agricultural application in the news recently. Stories abound of alleged damage to neighboring crops, communities, and even bird habitats. If you are growing the same crop as your neighbor is on their vineyard, you may have limited or no impact. However, in certain instances there can be a more substantial impact when your neighbors are raising other crops or livestock, operating an organic farm, or you are adjacent to other susceptible properties like a golf course, an apiary, or a residential community. Damage has occurred miles away from a farm, so even if one is not next door, one may be nearby.Why does spray drift occur?
Spray drift often occurs when wind or application equipment blows the chemicals off your property. You may think that drift will only occur when applications are done improperly. However, even if properly applied, drift may ultimately be unavoidable. Drift can happen days after application when chemicals volatize into gas naturally or due to higher temperatures. You can minimize drift by using the correct chemicals, properly maintaining equipment, always following manufacturer labels, factoring in the weather, and training employees.
Despite your best efforts, what happens if your pesticides do drift and damages your neighbor’s crop? As the growing season approaches, consider ways to properly protect your business from this exposure.
This article will not address the legal theories surrounding the liability of vineyard operators applying or hiring an applicator. Courts have differed on finding liability so we will leave the intricacies of the law to others. Elements of liability aside, if you are alleged to be negligent, you will need a defense. If found liable, you will want indemnification. Let’s discuss where to find that coverage with liability insurance.Insurance
Every insurance policy is different, so it is important that you read the terms of your policy and discuss them with a professional insurance advisor. Winery and vineyard policies may include multiple coverage parts including a Commercial General Liability (CGL) part and a Basic Farm Premises Liability (FL) part.
Standard commercial general liability coverage forms may contain an exclusion for pollution coverage for 'bodily injury' or 'property damage' related to the actual, alleged or threatened discharge, dispersal, seepage, migration, release, or escape of pollutants or some similar pollution-related exclusion. Such exclusions could apply to spray drift claims. Accordingly, consider obtaining an endorsement that provides coverage specifically for chemicals drifting off of your property resulting in damage to someone else’s property, such as their crops or livestock. The specific language in these endorsements vary so it is important that you read the endorsement terms carefully and discuss them with a professional insurance advisor.
Certain farm premises liability coverages include a limited amount of coverage for damage from chemical drift, which may include drifts that naturally occur during normal farm operations. However, the coverage may not include drift from aircraft, loss of market, or loss of use of soil and crops. Some farm premises liability coverage forms also exclude discharge from aircraft, which may be a concern if you contract for crop dusting services. Other coverage limitations to the farm premises liability coverages may also apply.
Commercial general liability and the farm premises liability coverages can be amended to include certain pollution-related coverages. However, this pollution coverage may require the release of chemicals to be “sudden and accidental” and take place while in “storage or being transported”. Such language may affect the application of the coverage to a drift claim. Accordingly, you may consider an endorsement specifically designed for chemical spray drift.Chemical drift liability
A chemical drift liability endorsement may provide coverage for damage to other’s crops and livestock, but an endorsement may also contain policy conditions, limitations, and exclusions. For example, a chemical drift liability endorsement may not provide coverage for the following:
- Damage to your own property, crops, or animals
- Damage you expected or intended to occur
- Bodily injury to people
- Government mandated testing or clean-up of pollutants
Other limitations and exclusions may also apply. It is important to read the policy and any potential endorsements carefully.
To obtain chemical drift coverage and to increase the liability limits, your insurance company may require additional information, such as:
- Demonstrating you have a strong risk management program in place to include proper documentation, employee training, and record retention for at least five years.
- A list of chemicals used to determine if any are restricted.
- If you are hiring an applicator, they may ask for a list contractors, the total annual cost for those services, and will want to confirm that each is properly licensed.
- A review of high risk surrounding exposures (organic farms, public parks, golf courses, schools, churches, apiaries (bees), or other public facilities) neighboring any of the farm locations where chemicals are applied.
If you are operating a tasting room or holding events at your vineyard, you may be asked to confirm that you are limiting access to the vineyard after an application, and that you are observing re-entry time intervals.
As with any other winery process, documenting your operations is a good management practice. In the event of a negligence claim, do you know:
- What brand or product name was used? Consider keeping a copy of the label.
- How much was applied and using what equipment?
- Where on the vineyard were chemicals were applied?
- What crops received the pesticide?
- The time the application started and stopped? A best practice would be to document the temperature, humidity, and rainfall too.
You may also want to review the level of worker training and supervision and ask:
- Are supervisors experienced with pesticide application?
- Be sure to document what specific employee training was completed. Have you kept records to show that you have trained them on the directions for applying each type of chemical used?
- Do they know how to use the equipment properly?
- Are you doing this each season with each new cohort of workers?
Spray drift of chemicals is a potential risk for vineyard operators. Liability insurance specifically designed for chemical spray drift may allow you to mitigate certain types of risk. For additional questions on chemical drift liability contact your professional insurance advisor.
*Markel Specialty is a business division of Markel Service, Incorporated, the underwriting manager for the Markel affiliated insurance companies.