Coverage requirements
Farm & Power Equipment Dealers
Last updated August 2026 · Maintained and reviewed by the Advocate Insurance Consultants coverage research team.
Overview
What an adequately protected Farm & Power Equipment Dealers program looks like
Farm machinery and power equipment dealers sell combines, tractors, and other farming machinery and attachments. Staff frequently deliver merchandise, sometimes over long distances, and pick up equipment for servicing. That regular, extended driving makes automobile liability the leading exposure. To address the exposures that drive farm & power equipment dealers, this Advocate Standard profile benchmarks Auto Liability, General Liability, Worker's Compensation, Fidelity Bond, Physical Property, combining limit and deductible standards with carrier financial-strength requirements.
Key takeaways
- Spans 255 published requirements across 40 coverage type-peril pairs.
- Applies to 3 asset types: Farm, Repair Shop, Retailer.
- Covers 14 coverage types and 14 distinct perils.
At a glance
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Completion score
9 of 40 WIM pairs required
Coverage tower
Required limits by coverage type and peril
Requirements
Full requirement set for Farm & Power Equipment Dealers
Every requirement in the Advocate standard, 255 rows across limits, deductibles, carrier rating, and presence checks. Search and filter to drill in.
Showing 50 of 255 matching · 255 total
Compliance
Who requires Farm & Power Equipment Dealers
- Floor-plan lenders financing tractor, combine, and attachment inventory require dealer open-lot physical damage coverage on the financed units and demand to be named loss payee on that schedule.
- Equipment manufacturers awarding a dealership set minimum liability limits and often require garage liability in the dealer agreement.
- Many states require an equipment or vehicle dealer bond and proof of coverage before issuing the dealer license.
- Landlords and the lenders behind the sales lot record their interest on property.
- Because staff deliver machines over long distances and service customer equipment, both auto liability carriers and customers relying on garagekeepers coverage depend on it being in force.
Carrier standard. Carrier must have AM Best rating >= A- and size >= VII.
Advocate runs these checks automatically for the brokers who place retail coverage.
Exclusions
What Farm & Power Equipment Dealers does not cover
- The lineup carries auto liability and property, but a dealer's obligations run deeper.
- Garagekeepers exposure, covering damage to a customer's tractor or combine while in the shop for service, needs its own coverage and is not answered by general liability, which excludes property in the dealer's care.
- Floor-plan lenders require open-lot inventory physical damage that a standard property form does not provide for financed units at retail value.
- Dealer surety bonds are a separate instrument, not insurance.
- Standard exclusions strip out pollution from fuels and hydraulic fluids, faulty repair workmanship, and flood or earthquake to the yard.
- Test-drive and demonstration accidents may need endorsement.
- Cyber exposure from financing paperwork sits outside the package.
Risk advisory
Typical coverage gaps in Retail
Farm and power equipment dealers should confirm garagekeepers limits cover the most valuable customer machine ever in the shop, since a fire or technician error on a late-model combine produces a large claim.
- Verify dealer open-lot physical damage matches lender requirements and lists the floor-plan financer as loss payee at full inventory value.
- Keep the state dealer bond current and separate from the insurance program.
- Auto liability and hired and non-owned coverage should reflect long-haul delivery routes and employees driving personal vehicles for pickups.
- Because fuels, oils, and hydraulic fluids are on site, add pollution coverage for spills and cleanup.
- Products-completed operations liability should answer defective-parts and faulty-service claims, and cyber liability protects the financing and customer data the dealership stores.
FAQ
Frequently asked questions
Do farm equipment dealers need garagekeepers insurance?
Yes. When a dealership services or stores a customer's tractor, combine, or attachment, that machine is in its care, custody, and control, which general liability excludes. Garagekeepers coverage pays for damage to those customer units from fire, theft, collision, or technician error while they are in the shop or on the lot.
What is floor-plan insurance for an equipment dealership?
Floor-plan or dealer open-lot coverage insures financed inventory on the lot against physical damage such as fire, hail, theft, and vandalism. Lenders that finance the equipment require it and insist on being named loss payee, so a covered loss protects both the dealer and the financer's stake in the units.
Does a farm equipment dealer need a surety bond?
Many states require an equipment or motor vehicle dealer bond before issuing a license. The bond is not insurance; it guarantees the dealer will follow the law and honor sales contracts, reimbursing customers or the state if the dealer does not. It is carried alongside, not instead of, liability and property coverage.
What insurance does a farm and power equipment dealer need?
A complete program pairs garage or general liability, garagekeepers for customer machines, dealer open-lot physical damage for financed inventory, auto and hired and non-owned liability for the delivery fleet, pollution coverage for fuels and fluids, products liability, workers' compensation, and a state dealer bond.
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