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Market Ready Farm to Restaurant – Product Liability Insurance Considerations



Authors as Published

By Ben Garber, Agricultural and Applied Economics, Virginia Tech; Kimberly L. Morgan, Assistant Professor and Kohl Junior Faculty Fellow, Agricultural and Applied Economics, Virginia Tech; Meleah Shadler, Agricultural and Applied Economics, Virginia Tech; Allyssa Mark, Program Associate, Virginia Beginning Farmer and Rancher Coalition Program, Virginia Tech; and Kim Niewolny, Associate Professor, Agricultural, Leadership, and Community Education, Virginia Tech

There are many factors to consider before selling your farm products directly to restaurant owners, managers, and chefs. Marketing management is an important component in the startup and decision-making processes for new and beginning producers interested in direct sales. The purpose of this series of publications is to inform Virginia producers about marketing and legal risk management tools, techniques, and resources available to help them prepare to sell food and food products directly to restaurant clientele.

Topics covered in this paper are expected to improve producer decision-making by providing a better understanding of product liability insurance considerations to help them manage risks associated with the legal aspects specific to direct marketing relationships. The topics covered in this resource are not all-inclusive, but after reading this publication, producers should be better prepared to build relationships with restaurant clients.

This is one publication of a 7-part series, available on the Farm to Fork Direct Market portal. A resource list that include examples, resources, blog posts and case study YouTube video interviews of successful farm to restaurant business owners, and upcoming training dates is available at the end of this publication.

For questions about this or other farm startup topics, contact your local Virginia Cooperative Extension office.

Businesses live and die by their ability to manage risk, and agribusinesses are no different. If a farmer is selling products to one or more busy restaurants, they are exposing themselves to risk with every meal served. Effective food safety measures greatly decrease the risk a farmer takes on with each sale, but a single outbreak has the potential to bankrupt an agribusiness. Therefore, every farmer who engages in direct sales of their food products to restaurants must have product liability insurance.

If a serious food-borne disease outbreak is traced back to a farmer’s products, each individual case can lead to tens or hundreds of thousands of dollars in legal damages, which is a risk many farms cannot bear. Depending on where the farm is located, $1-2 million in insurance coverage can typically be purchased for a few hundred dollars a year. That is a low price to pay to ensure the survival of the agribusiness.

In addition, farmers who purchase adequate liability insurance coverage add value to their product offerings to restaurants. Time-constrained chefs do not have resources readily available to track safe production and handling practices of the product before it arrives at their kitchen. This is not a chef’s area of expertise, and they typically rely on large food distribution companies to manage this detail.

Having a product they trust backed by a solid insurance policy purchased by their food suppliers allows them to focus on their craft. In addition, some larger customers, such as franchise restaurants, may require higher levels of coverage as a policy requirement.

Finally, if a farmer partners with a packer or processor, all partners are required to document that liability insurance has been purchased. Liability insurance is required every step of the way from field to fork in order to ensure a successful, long-term, farmer-buyer relationship.

When it comes to liability insurance, peace of mind is relatively inexpensive. Having the proper level of liability insurance allows farmers to focus on farming, and chefs to focus on cooking. Liability insurance helps add value and ensure the survival of the farm business and the relationships farmers spend so much time cultivating. To learn more, watch our interview with Farm Bureau Insurance Agent Garnett Brockman on our Virginia Market Ready YouTube Channel!

For more information about direct marketing of your farm products in Virginia, please contact Kim Morgan at or 540-231-3132, or, visit the Farm to Fork Direct Marketing Resources portal at For more information and resources directly aimed at beginning farmers, visit the Virginia Beginning Farmer and Rancher Coalition Program at


The Virginia Beginning Farmer and Rancher Coalition Program is a statewide, coalition-based extension program. The program is housed in Virginia Tech’s Department of Agricultural, Leadership, and Community Education and is a program of Virginia Cooperative Extension. The Virginia Market Ready Farm to Restaurant Program is sponsored by the Southern Extension Risk Management Education Center of the USDA Subaward #21667-14.


Garber, B. 30 November 2016. Conversation with Wade Hawkins and Terry Sager of the Shenandoah Valley Beef Cooperative. Virginia Cooperative Extension Market Ready Farm-to-Fork Direct Marketing Resources Blog. Link:

Garber, B. 16 February 2018. Interview with Garnet Brockman, Farm Bureau Insurance Agent. Link:

Vallotton, A., A. Battah, R. Knox, A. Vargo, T. Archibald, R. Boyer, N. Cook, and T. Drape. 2017. “Accessing Virginia’s Market Sectors: Fresh Produce Purchasing Considerations.” Virginia Cooperative Extension Service Publication, HORT272-NP. Link:

Virginia Cooperative Extension Market Ready Farm-to-Fork Direct Marketing Resources portal. 2019. Link:

Virginia Cooperative Extension Market Ready Farm-to-Fork Direct Marketing Resources YouTube Channel. 2019. Link:

Virginia Cooperative Extension, Virginia Beginning Farmer and Rancher Coalition Program. 2019. Link:

Virginia Cooperative Extension materials are available for public use, reprint, or citation without further permission, provided the use includes credit to the author and to Virginia Cooperative Extension, Virginia Tech, and Virginia State University.

Virginia Cooperative Extension is a partnership of Virginia Tech, Virginia State University, the U.S. Department of Agriculture, and local governments. Its programs and employment are open to all, regardless of age, color, disability, sex (including pregnancy), gender, gender identity, gender expression, national origin, political affiliation, race, religion, sexual orientation, genetic information, military status, or any other basis protected by law

Publication Date

May 10, 2019