Minimizing the 5 Biggest Risks in Agritainment

Posted February 13, 2024

For a growing number of farmers, ranchers and high net-worth owners of farmland, the soil isn’t just for producing food—it’s also for producing memories.

Agritainment, also called agritourism, uses a farm or ranch as the basis for a tourist experience, such as spas, weddings, corn mazes, pumpkin patches, farm stands, hunting grounds, haunted houses, vacation stays—anything that brings in people and money outside of the core production operation.

The concept isn’t new. Dude ranches have brought city slickers—and the movie “City Slickers”—to country experiences since the late 1800s, according to the Wyoming Dude Ranchers’ Association. But today, the concept is taking off.

The global agritourism market reached $65.6 billion in 2023 and is expected to grow to $176.6 billion by 2032, according to iMarc Group. Much of the growth is concentrated in Texas, the Rocky Mountains and along the U.S. coasts, where large cities and small farms have long been in close proximity, according to the U.S. Department of Agriculture.

What’s driving the growth? More and more affluent families are buying significant plots of land and farms. And farmers and ranchers are actively seeking to create entertainment opportunities that bring in extra income to protect themselves from the year-to-year vicissitudes of food production. That desire comes in the face of increasing demand from urbanites and suburbanites to find ways to connect with where their food has come from, according to Eater magazine. Those same folks also want to get a taste of rural life by holding their wedding in a barn or enjoying an overnight stay in a farmhouse.

High net-worth individuals and farmers alike looking to diversify their income streams through agritainment must also factor in the potential risks associated with these types of operations because existing policies for farming and ranching activities typically do not offer suitable protection.

Biggest Exposures in Agritainment

As the scope of the agritainment industry grows, so do the risks and the costs of insuring both the entertainment and the property itself. Here are five potential risks and insurance exposures to consider:

1) Increasing size of facilities. Many ranchers and farmers advertising the use of their space for weddings and other large events have built extremely large facilities for their events. Traditionally, rural properties included one home, averaging 2,500 to 3,000 square feet in size. Now, many who are advertising a luxury experience have built homes up to 10,000 square feet in size, as well as barns and horse arenas hundreds of thousands of square feet in size, making the cost of insuring these structures more expensive.

2) Weather-related risks. It’s not news that the number of weather events with $1 billion or more in total damage keeps going up, which of course impacts those larger structures. But for agritainment, farm and ranch owners also will have to evaluate how they are protecting their guests. At a minimum, they must alert the public on their property about impending weather-related issues, but what happens when a wildfire, tornado or lightning strikes?

3) Property-related exposures. Collisions, trips, falls, animal bites—there are many ways for guests to injure themselves while walking or riding about the property. There are also attractive nuisances, or items that might be off the agritainment trail, like a tractor, or certain animals, which draw the attention of curious guests and be a liability to owners. Exposures related to recreational activities, transportation of employees or customers, operation of machinery, parking and traffic controls, walkways or anything else guests could encounter must also be addressed.

4) Fire risk. Farmers and ranchers may already be familiar with how long or difficult it can be for fire services to get to their land, but may not understand how much that risk magnifies when agritainment becomes part of their business.

5) Use of all-terrain vehicles (ATVs) and other equipment. Offering guests motorized vehicles or access to certain equipment or high-risk activities may be difficult to secure coverage for. Mandating that waivers be signed for using these types of equipment does not guarantee that you will be covered if an incident arises.

Minimizing Risks for Agritainment Businesses

Encouraging agritainers to implement safety measures while their properties are in use is an essential part of minimizing risk. Here are seven ways they can do it:

1) Use waivers. For any activities that could be deemed dangerous or risky, agritainment property owners should have guests sign attorney-vetted waivers. They are not a guarantee of protection from liability if an accident happens, but they are a deterrent and create a level of understanding that guests are putting themselves at risk.

Examples of activities that should have waivers include hunting and guiding; school tours; equine boarding; equine riding lessons; trail rides; hayrides; corn mazes; food markets; ATV tours; guest overnight stays and leased hunting.

2) Encourage safety. In all activities, safety should be first and foremost on the minds of farmers and ranchers, and they should clearly communicate that to guests through signs, restricting visitors from areas where they don’t need to be, and training. For example, a hunting ranch could have a shooting range that requires target practice before going on a hunt.

3) Educate staff and guests. Agritainment businesses should have accident and evacuation procedure plans in place and employees should be trained on equipment maintenance and first aid procedures. Encourage property owners to create an employee handbook with safety guidelines and training on potential risks to reinforce this.

Hiring adequate staff to observe visitors and keep grounds clean and free of debris in areas where guests are present is also recommended. Guests also should be made aware of potential hazards on the property. Use signage that explains the potential threat and discourages guests from going into restricted areas.

4) Keep order. Agritainment property owners should maintain a clean environment, detailed records, comply with local codes and laws, and, of course, have adequate insurance policies to offload their risk. Establishing rules for guests who plan on using the facility is also recommended.

5) Be aware of vendor activities and responsibilities. Property owners can transfer some risk to certain vendors who come on the property for events, such as caterers hired for a wedding.

But agritainment businesses also must be aware of their vendors and the work they are doing because they may still be held responsible. For example, a vendor at one agritainment business installed two heaters in a building but didn’t notice they were placed too close to the ceiling. The business turned the heaters on, and the barn caught fire with all the equipment in it, causing $800,000 in damage.

6) Communicate to make sure the business is covered. Property owners should inform insurers and agents of all activities that will take place on the property to ensure they have the right coverage—and enough of it.

7) Understand the risks. Insurers should visit agritainment properties they are covering and perform a walk-through with the property owner to help pinpoint potential risks. Talk to the property owners about what events will take place, how many people will be on the property, whether alcohol is available, if outside vendors will be involved, and the necessary coverage needed to protect their assets.

There is no overarching agritainment insurance. The types of insurance needed for those in the agritainment industry will depend on the nature and frequency of the business or events taking place on the property. By having a detailed conversation with your agritainment property owner, you can determine what may already be covered under existing policies and what additional insurance is required.

This article, by Tony Boyd, senior vice president at HUB Private Client, is used with permission.  This article was recently published in Independent Agent magazine: https://www.iamagazine.com/.