It is commonplace for neighbouring farmers to help each other out. However, there is a risk that even if a friend or neighbour provides labour, and is not receiving payment for the work, they may legally be considered an employee. This can present problems for insurance, leaving the farmer without any cover for the voluntary worker in the event that they incur an injury.
Farm insurance policies will often include public liability cover, which applies to any visitors to the farm who are not providing labour. However, that cover will often exclude injury to employees – the definition of which can include voluntary workers.
Brodies recently acted in a case where this issue arose. The client, the farm owner, had no formal employees and operated the farm by himself. However, for several years a neighbouring farmer assisted when needed and likewise, the client would reciprocate. On one such occasion the client's neighbour was helping with cattle and sustained an injury.
Consequently, the farmer faced a personal injury claim for which he was uninsured, due to a gap in his insurance cover. While liability was not clear cut and the case could have been defended, the potential financial implications of defending the case meant that securing an early settlement was the best option, albeit at significant cost to the farmer, by the time compensation, legal fees and expert reports were included. On this occasion the client avoided having to sell livestock, or the farm - but those are potential outcomes for businesses that find themselves in a similar position.
This case is an important reminder to other farming businesses to be aware of what their insurance covers. As per HSE statistics, farming is a high-risk activity, and in order to ensure that neighbours or friends providing unpaid labour are covered under an insurance policy, employer liability insurance cover is likely to be required as this will usually extend to voluntary workers. This is where gaps in cover can arise, as farmers who do not have regular employees may not be aware that employer liability cover may still be required. Farm owners/operators should check their insurance cover, especially if they rely on neighbouring farmers or friends helping out, even if it is just on an informal basis or at certain times of the year.
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