Some folks who drink raw milk probably already see themselves as risk-takers, but they may not have thought about the fact that drinking their favorite beverage increasingly means not just taking risk but, for the producers, also “going bare.”
“Going bare” is what the insurance industry calls it when someone opts to go without coverage either because they cannot afford it or because it is just not available. For at least the past two years, reports have popped up around the country about raw-milk producers having difficulty obtaining or continuing insurance coverage.
One example came early in 2012 when the Farm Bureau-owned Rural Mutual Insurance Co. sent out notices about all Wisconsin farm policies it covers specifically advising policyholders that their coverage does not provide for “the sale and/or distribution for offsite consumption of unpasteurized (commonly called raw) milk from cows, sheep and goats for human consumption.”
Retail sales of raw milk are illegal in Wisconsin, but off-site consumption of unpasteurized milk bought on the farm is legal. However, raw milk picked up on the farm has apparently become too risky for insurance coverage in Wisconsin.
What began as decisions by individual carriers who sell policies directly to small farms is now a concern for the big re-insurers such as Kansas City, MO-based Aon Risk Solutions. It is more of an insurance company for insurance carriers and helps to keep the industry solvent by spreading risk.
“Most of the entities we work with are larger commercial operations and are not engaged in the sale of raw milk,” explained Tami Griffin, deputy national director for Aon’s Food Systems, Agribusiness & Beverage Group.
“That said,” she told Food Safety News, “we do work with, and have relationships with, underwriters who are in the business of insuring farms, and I would say that they are increasingly concerned about what farmers are selling to consumers through farmers markets, farm stands, etc.”
“Because of the press that raw milk gets, it is definitely on the radar of insurance companies, and I have heard some carriers are not willing to provide coverage for those selling it,” Griffin added.
Insurance coverage going away is still coming as a surprise for some raw-milk producers. Dog Mountain Farm near Carnation, WA, outside Seattle — a stop on many a foodie’s tour itinerary — recently learned that its carrier was dropping its raw-milk coverage.
Dog Mountain runs a farm-to-table café offering a menu for three meals a day, with patrons being a mix of those food tourists and area residents. They had invested $75,000 in a USDA-certified raw goat milk dairy and then found they had lost their liability insurance.
For a raw-milk producer, going bare carries the same risk as going without automobile or home insurance. It means being responsible for any kind of damages or injuries without being able to share that risk with an insurance company.
It is not uncommon for treatment of a child or senior citizen injured by a pathogen such as E. coli O157:H7 or Listeria to result in direct medical costs exceeding $1 million. It makes the decision to go bare literally a bet-the-farm kind of decision.
While tough to get, raw-milk insurance has not totally gone away. Kendall Turner, a Denver insurance broker, advertises on the web that such coverage is still available.
“Recently, it has become very difficult for dairy farms to obtain liability coverage for the sale of raw milk,” Turner said, adding that he can determine in about 20 minutes if someone qualifies for coverage.
He said that the “biggest challenge for the farmer is to understand is that the insurance company sometimes has more rules than the state … .”