1. Forms
2. FL
3. FL-04-07

What the Form Is

The FL 04 07 Additional Insured and Residence Premises endorsement is used with a Farm Liability Coverage Form (such as FL 00 20) to broaden the scope of liability protection. Its primary functions are twofold:

• To add specific individuals as named insureds who reside in the named insured's household but may not automatically qualify as an "insured" under the base policy's definitions. This can include individuals who are not relatives or dependents as typically defined.
• To extend liability coverage to other residence premises owned by the named insured that are not part of the primary farm location.

Essentially, this endorsement customizes the farm policy to ensure that liability coverage adequately addresses the specific household composition and property ownership of the insured.

Classes of Business It Applies To

This endorsement is specifically designed for Farm Insurance policies. It is relevant in situations where the standard farm liability coverage needs to be extended, such as:

• Non-Traditional Households: When individuals who are not relatives or legal dependents (e.g., a domestic partner, a long-term unrelated guest sharing the home) reside with the named insured and require liability coverage under the farm policy. For example, a farmer may have a friend living with them long-term in the farmhouse who assists with non-farm related household duties.
• Multiple Owned Residences: When the named insured owns additional residential properties separate from the primary farm premises (e.g., a vacation home, a dwelling in a nearby town) and wishes to have liability coverage for these locations under the farm policy. For instance, a farm owner might also own a small house in a neighboring village that they use personally or occasionally allow family to use.

Special Considerations

• Clarifying Insured Status: A key aspect of this endorsement is that it can provide insured status to household members where no blood relationship or dependency situation exists. This is crucial for modern, diverse household structures.
• Necessity Assessment: This form should be considered when the definition of "insured" in the base Farm Liability Coverage Form (e.g., FL 00 20) does not automatically cover all desired household members. The base form typically covers resident relatives and resident persons under 21 in the care of an insured.
• Premises Eligibility: When adding other residence premises, these locations must be acceptable to the underwriter and meet the insurer's guidelines for coverage under a farm policy. The nature and use of the additional residence (e.g., personal use, infrequent rental) will be a factor.
• Real-world example: An insured farmer allows their adult child, who is financially independent and not involved in farm operations, to live in a separate house on a non-contiguous parcel of land owned by the farmer. The FL 04 07 could be used to add this child as an insured and the separate residence as an insured location for liability purposes.

Key Information for Agents and Underwriters

• Risk Assessment:
  • Additional Insureds: The activities and potential liability exposures of any individual being added should be evaluated.
  • Additional Residences: The characteristics, occupancy, maintenance, and any specific hazards of the additional premises need to be assessed. Underwriters will need to understand if the residence is used personally by the insured, rented to others (which might require different endorsements or a separate policy), or vacant.
• Pricing: Adding insureds or premises typically increases exposure, which may result in an additional premium. The specific rating will depend on the insurer's guidelines and the details of the added risk.
• Coverage Gaps Avoided: This endorsement helps prevent potential coverage gaps where individuals residing with the named insured or other owned residences might otherwise lack liability protection under the farm policy.
• Underwriting Guidelines:
  • Confirm the relationship of the proposed additional insured to the named insured and their residency in the household.
  • For additional residences, verify ownership and the exact nature of their use. Insurers may have specific rules about covering rental properties or vacant dwellings under a farm policy.
  • Ensure that the type and condition of the additional residence are acceptable under the insurer's farm program. Some insurers might prefer or require a separate dwelling policy for non-farm residences, especially if they have distinct or higher risk profiles.