Insurance

bucks(9 Arizona)July 6, 2006

I am a market grower and sell less than $5,000 a year in produce. I was approached by a large organic chain to see if I wanted to sell my produce to them. It sounded exciting at first, but all of a sudden they wanted proof of liability insurance. First of all I am not clear about what the purpose of that type of insurance would be for an organic grower, and second of all does anyone have an idea of what it would cost. I am used to selling under the radar and really wonder if maybe I should stay where I am at or go for it. I sell everything I grow right now, so I am wondering to myself why bother, or is this an ego thing for me. Any advice or help would be appreciated.

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anniew(4-5/PA)

Part depends on how much liability they want. I have 100,000 and it is simply a rider on my homeowners. It covers me wherever I sell...at home, farmers market, etc. But some markets require a million dollars worth of insurance, and that would not be something my current insurance company could do, unless I went to a farm policy. Liability usually covers such things as if someone falls where I am marketing, but it also covers product liability. And even though you are an organic grower, someone could claim that they got sick from eating your stuff...and you'd have to defend yourself...if insured the insurance company would do the defending.
So for your question, the cost would depend on how much is required, your state's rates, etc. Remember, any one can sue you...for any reason...and even if it is a false suit, it takes money to depend it.
I'd also think that you'd consider that you'd have to hire people to help since you said you sell everything you grow right now. Do you want to supervise employees? Or do you just love to grow?
Good luck making a decision.
Ann

    Bookmark   July 7, 2006 at 9:18PM
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ohiorganic(5/6 SW Ohio)

I have a million dollar liability rider on my farm insurance policy that costs about $28 a year but not all insurers will do this kind of coverage.

And I have to ask if you are doing so little selling why would you want to do wholesale markets/ you would make far less than selling direct to the customer and the big corp would likely force you into growing ever more for them for less and less money. The "big money" is in selling direct IMHO

    Bookmark   July 12, 2006 at 7:05AM
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organic_nut

the farmer becomes the slave of the middle man. be super careful. they lure you with the promise of money but you will only see more debt. do not be greedy. be free and independent. your greed will enslave you. it is the ideas in your own mind that will make you a slave.

what prices will you get. if you walk in with a truck load of perishable veggies and they say the prices have gone down. will you be able to walk out and dump the truck load for compost. or will you sell for what they will pay.

money gives strength. you will be in a very weak position. unless you have other buyers in the wings. the long term solution is to develop cash retail customers who come to you and pay our price. not you drive a truck at 4 am to deliver and learn they will not pay your price. they have decided to reduce the price.

they will tell you they can get it cheaper out of california. etc. it goes on and on. you can never win. they play a game of money. you play with your life and hard work and committment to your word. it all means nothing to them.

right now they are buying it for $11. they want to buy from you for $10. all happy and you sign up. now they go back to the first guy and get him to sell for $9. then you show up with a truck load and they offer you $8. and they tell the guy who was at $11 and $9 that they can only do $7 now. and you will get $6 for the next truck load. and the guys doing this to you will get a raise because they saved the company money and got the stuff cheap.

what was the result. well there was a farmer with wife and children who was getting $11 and you joined the bid and now he gets $7. not enough for his wife and kids. and you used to have many retail buyers at $12 and now you are offered $6. so you and your unknown farmer friend destroyed each other in your rush for money.

they run an auction in reverse but never really tell you that. but you are given some friendly hints but you are lead to believe all will be rosey.

If you want to learn. then go do it. get wiped out. feel the pain and anguish. then you will have learned from experience and will never do it again. but it might mean a year of work for nothing.

    Bookmark   July 12, 2006 at 8:34PM
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bucks(9 Arizona)

Actually Organic Nut it happened to me two years ago. I was asked to grow okra earlier in the year for this guy for a really early crop. I did so, and two eeks after I had started my deliveries, He tells me he is closing his fruit stand for a month. I said what am I to do with all of this okra well he said that was my problem. So later that year he asked me how much he was paying for my okra and I told him $1.50 per pound and he said well I can buy it for $1.00 from this guy. Well I went home and plowed it up. I came by to drop off some tomatoes and the owner asked where was his okra delivery and I told him well you said you could get it for $1.00 per pound so I plowed mine under. He said but I still would have bought yours as he cannot produce enough. I said well I was not interested in selling him okra anymore. So I stopped selling to him altogether. I only need to be burned once by each customer and that is it for me.

    Bookmark   July 21, 2006 at 9:59AM
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