Want to poke at a hornet’s nest? Ask a half dozen insurance agents about insurance for beekeeping!
I did almost ask a half dozen. Their answers were varied, ambiguous, contradictory, and often confusing.
That’s not the fault of the agents who agreed to be interviewed. With one exception (more on him later), they went out of their way to be helpful. It’s confusing and varied because insurance interpretations and requirements vary greatly by state, insurance company, and circumstances. There are very few black and whites.
Sounds a lot like beekeeping, doesn’t it?
So, do you need insurance if you’re a beekeeper? Perhaps.
If you’re a commercial beekeeper, insurance is part of doing business, and you likely have a variety of insurances in place. Along with perhaps Worker’s Compensation insurance to cover employees regarding work-related injuries, and vehicle insurance to protect your fleet trucking bees across the U.S.A, you likely also have some sort of farm policy that covers the agricultural enterprise of honeybees—the equipment, the facilities, all the things related to the business. You may even have insurance against a loss of honey if there’s a drought.
But what about the rest of us beekeepers? Those with a few hives in the backyard, selling extra honey when we have it, and perhaps selling lip balms and lotions at the local farmer’s market, and / or candles at the holiday craft fair. Some days we dream about giving up our day jobs to keep bees, but it’s usually just a dream, not a goal. We earn a living elsewhere. That income fuels the hobby that might occasionally earn us a little money, although we’re still far away from breaking even.
Probably how far away we are would shock us if we ever added up all the related expenses. Do we really need one more, in the form of insurance?
As every insurance agent will tell you, you need insurance. They’re in the business of selling insurance. No surprise there.
Insurance agents are also in the business of making sure the unexpected doesn’t wipe out your lifestyle, your security or your future. They work all the time with people who have had the unexpected happen. Thus, they want you to have the appropriate protection, via insurance. Naturally, it makes them quite happy to sell it to you.
What are some of those “unexpecteds”? There are thousands of possibilities, but you don’t have to stretch much to imagine these:
- You get a call from someone who purchased your honey at the church fundraiser. They claim it made them ill, and are sending you the medical bills.
- That cute gap-toothed cousin of your neighbor kid, they’re always roaming through your backyard, got stung. Turns out he’s terribly allergic, and ended up in the Emergency Room.
- The lady who begged for comb honey, such that you cut some specifically for her, said there are worms in it. She wants her money back, and you to pay for the urgent care visits for all the kids who tasted it at the birthday party.
- A swarm of bees lands at the nearby soccer field, disrupting the all-day tournament. While it’d be difficult to prove they were your bees, the organizers, food vendors and families from a three-county area want their money back and approached you—the only one in the area with bees.
- Great day at the craft fair—until someone fell into your booth and injured herself hitting your display table. She missed lots of work says her attorney, who contacted you.
- The farm market that sells your extra honey said a customer returned a bottle with rodent hair in it. They’ve pulled the rest of your honey, and want to know what to do about future customer complaints.
- The tornado spared your house but took out all six of your hives and their occupants.
- The teenager you hired to cut your grass while you were on vacation got stung badly and went to the ER. You’d told him to not even mow anywhere close to the hives, but he forgot and said he bumped into them.
- A customer of your lip balm said it caused her to break out. She’s been a customer for years and thinks that batch was tainted. You’ve got her medical bills to cover (or the hassle of challenging her about that), and you’re tossing $400 worth of product just in case there is something to her claim.
You’re probably rolling your eyes at that list, and asking “really? What are the chances of that happening, and to me?”
You know, deep down, that everything on that list is plausible. Things like those could happen to about any beekeeper.
Unfortunately, in today’s sue-you society, whether someone has a case or not doesn’t matter. They can always get a lawyer, and tie you up with legal hassles as well as tie your stomach in knots. The legal expenses alone, whether you ever go to court or not, may be enough to justify the cost of an insurance policy.
But What About My Homeowner’s Insurance Policy?
Chances are you have a homeowner’s policy in place. That policy may cover some of the possible “unexpecteds”, like stings or swarms to the wrong location (#2, 4 and 8.) In those cases, your insurance company would probably handle the issue, but perhaps only once. They have the right to drop you when your risk (and thus theirs) becomes too high. Beekeeping next to a soccer field may be too high of a risk in their eyes.
For #7 on the list, the tornado, your homeowner’s policy probably also covers the loss of the hives, but not the honeybees. But, like for every loss, like this one and #2, 4 and 8, you’d need to evaluate the value of the liability versus your deductible. Is it really worth it?
Even if you decide yes, keep in mind that those hives (not the bees, just the hives) would most likely only be covered by “ACV”, which is actual cash value. ACV looks at the cost minus depreciation. Chances are if you have six hives, you’ve had them for a while and their ACV may not make the claim worth it, especially after you pay the deductible.
For items #1, 3, 5, 6 and 9, for most of the insurance agents we talked with, your homeowner’s policy would not cover the situation because that was a business liability. Because you’re doing something for money, your beekeeping in those cases is a business, for which you’d need a business policy. When you step away from doing an activity as a hobby to doing it as a business, your personal property insurance may no longer cover your business assets.
Hobby or Business?
When is your beekeeping a business and not a hobby? You might have never set out to sell honey; you only do it if you have extra. Is it really a business?
“Hobby versus business” is a matter of interpretation by your insurance company, and interpretations vary. One agent notes that their company follows what the IRS generally says, which is—it’s a business when you start making decisions based on profit (or expected profit.) If you manage bees and sell excess honey to friends, it’s probably still a hobby.
If you manage bees and are working to maximize honey production, or plan to sell 10 nucs each spring, or get a couple hundred bucks each year from the farmer for the hives you have in his orchards, it sounds like you are working to make a profit. A business policy would be required to protect those assets of the business.
Another agent’s company classifies it as a business when you make more than $2,500 gross sales in a year. A third agent’s company defines your efforts as a business when you collect a single dollar. Just like in beekeeping, the same question can yield vastly different answers.
Craft Fair Coverage
Craft fair management is increasingly asking for a “certificate of liability” these days. That certificate covers the craft fair, in case anything happens in your booth, like #5 above. It does NOT typically cover anything sold from your booth, like #9.
Most insurance companies will write a “certificate of liability” for you, as an extension of your homeowner’s policy, sometimes for an additional small fee. But again, that doesn’t protect you against claims that the candles you sold exploded, or the lotions are tainted. For that you’ll need product liability insurance.
Most insurance agents did agree on one thing; if you are selling a product, you need product liability insurance. With your homeowner’s policy, product liability insurance is probably not included.
What Might Insurance for “the Little Guy” Cost?
There are multiple ways to get insurance on your bee-related activities. The one most often mentioned by agents goes by different names, but it is a business policy, specific to the activities and assets of your business, and would cover all of the scenarios listed above. That policy runs between $350 - $600 a year for a base policy that covers up to a million dollars in liability. Naturally, there are all sorts of fine print that should be discussed with your insurance agent to help you decide if that’s the right policy for what you do.
Another option is to convert your homeowner’s policy to a commercial farm/ranch policy. This isn’t an option available from all insurance companies, but some do provide it. It’s developed for people who have farm/ranch activities, and beekeeping may fall under this. Costs on this policy vary, but for example, if you’re homeowner’s policy costs $1,100 annually, a farm / ranch policy will probably cost a bit less, and essentially replaces that policy.
General Overall Advice
I interviewed five different insurance agents. Again, four of them could not have been more helpful. They’re listed below and welcome your inquiries. One of them is not mentioned—he’s the insurance agent who said “if you’re keeping bees, don’t tell your insurance agent, because they’ll probably drop you.” When I shared his quote with the other four agents, they were flabbergasted. They strongly recommend that you DO tell your agent. You’re better off knowing what is covered and what isn’t before you suffer a loss.
Other salient advice from them:
- “Spend some time evaluating your situation with your insurance agent. There are many grey areas, and we need to understand your unique situation before we can advise you of any gaps in coverage and liabilities.” Eric Wheeler
- “Every insurance company has their rules and regulations. If yours won’t or can’t handle your needs, find another one.” Lani Basberg
- “Like most things we insure, the potential loss from beekeeping has lots of twists and turns. Sit down and talk with, preferably, a multi-company agency so they can help you find what you need.” Michelle Clark
The Wonderful Agents Who Helped
Lani Basberg; firstname.lastname@example.org; Louisville, KY
Michelle Clark; PR Davis Insurance; Portage, MI; www.prdavisins.com
Cassidy Popp; Texas Insurance & Financial Services, Inc.; El Campo, TX; email@example.com
Eric Wheeler; State Farm; Three Rivers, MI; firstname.lastname@example.org