Foranalyzing appropriate liability risk premium first we should analyzea risk and risk should be analyzed and evaluated in terms ofexposure. Production agriculture is an inherently hazardousoccupation especially when farming with livestock and crops certainactivities bring about legal liability risk.
For example liabilitiesin result of environmental degradation and noise and air pollution inresult of using different pesticides or steroids. Same like injuries,illness and death of employees or third person and property rightsarising from using or different agriculture machinery on the field .Spreading of fire is one of the major risk experienced in thisbusiness because fire can spread rapidly and once its get out ofcontrol its results can be devastated and can badly damage propertiesin the neighborhood and the farmer may be held legally liable fordamaging surrounding properties and same like that same big farmersuse dams for water storage overflowing of these dams can damagesurrounding properties. In farming of life stock risk of cattle orany other animals breaking through fences damaging surroundingproperties/crops and roaming onto road which can cause some fatalroad accidents which may result in fatal injuries. Risk arising bythe use of pesticides, hormones and steroids which farmers use forbetter health and fast production of their live stock.
Although thispractice is quite common but is unhealthy and its consumption mightcause health issues which also can arise legal liabilities. Same likethat crop spraying especially aerial crop spraying is a usual androutine activities but human error can happen any time for e.gspraying on windy days can effect neighbor property or even humanwhich may lead to severe consequences. Underwriter should considerall these factors and for that the can analyze or go through pasthistory of business or businesses with same nature and geographicallocation.