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For
analyzing appropriate liability risk premium first we should analyze
a risk and risk should be analyzed and evaluated in terms of
exposure. Production agriculture is an inherently hazardous
occupation especially when farming with livestock and crops certain
activities bring about legal liability risk. For example liabilities
in result of environmental degradation and noise and air pollution in
result of using different pesticides or steroids. Same like injuries,
illness and death of employees or third person and property rights
arising from using or different agriculture machinery on the field .
Spreading of fire is one of the major risk experienced in this
business because fire can spread rapidly and once its get out of
control its results can be devastated and can badly damage properties
in the neighborhood and the farmer may be held legally liable for
damaging surrounding properties and same like that same big farmers
use dams for water storage overflowing of these dams can damage
surrounding properties. In farming of life stock risk of cattle or
any other animals breaking through fences damaging surrounding
properties/crops and roaming onto road which can cause some fatal
road accidents which may result in fatal injuries. Risk arising by
the use of pesticides, hormones and steroids which farmers use for
better health and fast production of their live stock. Although this
practice is quite common but is unhealthy and its consumption might
cause health issues which also can arise legal liabilities. Same like
that crop spraying especially aerial crop spraying is a usual and
routine activities but human error can happen any time for e.g
spraying on windy days can effect neighbor property or even human
which may lead to severe consequences. Underwriter should consider
all these factors and for that the can analyze or go through past
history of business or businesses with same nature and geographical
location.  

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