Farms come in all shapes and sizes, from hobby farms to large-scale industrial operations. Because of the diversity of the industry, there’s no ‘one-size-fits-all’ farm insurance policy. However, there are some basic types of insurance that almost all farms will need.
At a minimum, most farm insurance packages will cover things like:
- Farm buildings
- Vehicles
- Business Interruption
- Produce and livestock
- Machinery and equipment
- Liability
But what exactly does that mean? Let’s expand a little on each.
Farm buildings– There are generally two types of buildings on farms, residential and outbuildings. Because some of the work done on the farm can be at a desk, or your home office, which is residential space on your farmland, you will need residential property coverage. This protects the structure in case of fire or wind damage, as well as the contents inside. If you have more than one residence on your farm, make sure it’s included in your policy.
Farm outbuildings, like barns, also need property coverage. These buildings can be older or were erected before the current building codes, and replacing them can be costly. Even new buildings need the right coverage in place to ensure you are adequately protected. Having the right coverage can prevent a small issue from turning into something more significant.
Vehicles – Whether it is the farm pick-up truck, minivan or classic car you have on the farm, the proper type of coverage is vital. You might require both personal and commercial insurance, depending on what you’re using them for. Vehicles that are only for personal use can be covered under your regular car insurance policy, but anything that is used for farm work needs to be under a commercial policy.
Equipment and machinery – Everything from the tools you use in the barn to your tractors and combines should be covered on your insurance policy.
In the event your machinery is damaged due to fire, physical damage or theft, basic farm insurance covers the cost of repairing or replacing the damaged property. You can purchase additional coverage to insure against other types of damages as well.
The equipment you use every day is not only critical to your business, but it’s also expensive to repair and replace. That’s why it’s essential to make sure you are insured for the full value. Not only does that protect your equipment, but it protects your revenue by limiting your out-of-pocket expenses. Depending on how critical a piece of equipment is to your business, you may want to consider additional insurance to cover rental costs and lost revenue. It’s essential to discuss this directly with your broker to decide what makes the most sense for you and your business.
Produce and Livestock – If you have livestock on your farm, like cattle, pigs or horses, there are different types of coverage available. Along with basic insurance for theft and fire, you can also get special insurance to cover unexpected health problems. The same things that can devastate your livestock, outbuildings, and machinery can also wreak havoc on your hay and feed supply. Covering yourself for financial losses if your stored hay and feed are ruined will ensure your profits are protected.
Liability – All businesses need liability coverage, but farms come with some additional inherent risks. If someone hurts themselves while on your property, liability insurance can help with financial damages and protect you in case of any litigation.
Obtaining the right liability coverage for your needs is crucial. While general liability coverage will work for many operations, farms that are open to tourists or sell at farmer’s markets might require more complex coverage.
Business Interruption – This coverage will provide you with an income if something happens that interrupts the regular course of business for your farm. This includes things like mechanical breakdowns, fire and flood. Any of these events could result in a business closure for many months or, in extreme cases, even years. Having this coverage can help with the costs of getting your business back up and running after a loss.
Today’s farms are sophisticated businesses and making sure that you have the coverage you need requires specialized knowledge and experience. Our dedicated team of agribusiness experts understand the difficulties involved in running a successful agriculture business. They will take the time to understand your unique operation and build a customized insurance solution that makes sense for you and your business.
Whether it’s covering your equipment and machinery, or your livestock and produce, the right coverage offers peace of mind and protection for everything your business relies on.
