When it comes to your farm, insurance should be at the top of your list of things to know about. Insuring your farm is important to your business success and livelihood, and making sure it's done right can save you a lot in the long run.
Your independent insurance agent is the perfect resource to have in your back pocket when it comes to insuring all aspects of your agribusiness. Knowing how coverage works and where to get it is essential in running a business. But first, here's a bit of background to help give you a better understanding of what protecting your farm includes.
How to Insure Your Farm
Insuring your farm is one thing, but knowing where to start is another. Your farm is not only a source of income, but also a home to you and your family. To insure both aspects can be a bit daunting if you're not sure what you're looking for.
First, you'll need to have your independent insurance agent look at pricing and coverages for your farm's specifications. So whether you have a small, few-acre farm or your land is just shy of several miles, your coverage needs to apply adequately.
Your independent insurance agent will need to know the following to get started:
- Your farm's specifics: What are the hours of operations? What is your business registered as? What crops or livestock do you produce? What are the gross annual revenues of the farm? What year were the buildings built and what are the specifications of each? What type of equipment and machinery are on the premises?
- What are your buildings, equipment, machinery, farmhouse, livestock, and crops worth? This isn't the sentimental value but what the market can bear and replacement cost. Meaning what is the value of each individual piece of equipment, building, livestock and crop if it were to be replaced?
- What preemptive protection do you have in place? Are there proper protocols to make sure the public stays off-premises and away from restricted parts of the farm? Are there security cameras? Is there a designated safety officer?
When to Insure Your Farm
Immediately. If you already own a farm that's not insured, you'll want to contact an independent insurance agent right away. If you're thinking of buying a farm, give an agent a call, they can help get you set up straightaway. Plus, they may be able to give you a few tips for setting up your farm in a way that lowers your premiums. There are a lot of moving parts when it comes to your farm and you'll want every potential risk covered.
Some risks that you'll want insurance for ASAP:
- Liability: For accidents that could occur involving bodily injury and property damage.
- Crops: You'll need insurance to protect your products before, during and after.
- Livestock: Whether you have a prize-winning bull or an average steed, you'll need coverage for them.
- Equipment and machinery: What's a farm without a tractor? Some of those pieces of equipment and machinery can cost a pretty penny, so getting them insured to value is necessary.
- Pole barns and other structures: Your barns are where you store all your farm gear and livestock, so having it properly insured is, well, smart.
- Land: If you have a few acres or thousands, you'll need them insured in case someone happens to stumble on your property.
Steps to Take In Minimizing Your Farm's Risk
By now, you should know that the main purpose of insurance, any insurance, is transfer of risk. You are essentially transferring your farm's risk to the insurance carrier and paying a monthly, quarterly or annual premium for the right to tap into their reserves should a claim ever arise.
In order to offer the best and lowest premiums, insurance companies like to see that you take your farm business seriously. And that means they want you to be as proactive in your business at minimizing risk as possible. The more risk you avoid, the more risk they avoid, and they will reward you with lower premiums.
Some premium-saving, risk-minimizing things to do on your farm business:
- Have a designated safety officer for the farm to keep staff and any visitors out of harm's way.
- Hold regular safety meetings for all employees to ensure proper procedures are being adhered to.
- Have clearly marked and sectioned-off restricted areas to avoid curiosity seekers.
- Have rules posted, marked and signed by every employee and any guests to avoid confusion and claims.
- Make sure that all children are accompanied by an adult and rules about that are posted.
- Have all equipment and heavy machinery restricted, disengaged and put out of harm's way.
How Much Will Agribusiness Insurance Cost?
Farm insurance rates can be costly, but it all depends on your farm's specifics. Possessing a good idea of the following before your conversation with an independent insurance agent will help get you a fairly accurate estimate.
Items that impact your agribusiness insurance premiums:
- Number of acres: How much land you have will cause pricing to go up or down. The more you have to insure, the more premium you will pay.
- Barns and other structures: The number of barns and other structures and their size and quality will factor into your cost.
- Production: What you grow, harvest, produce and sell will also impact premiums. It costs more to insure a tobacco farm than a wheat farm. The type of item and higher inherent risk before, during and after production of that product will affect pricing.
- Farmhouse: Size, quality, and features of your home on your agribusiness will also impact your pricing.
- Equipment and machinery: Both motorized and unmotorized property like tractors, threshers, and other equipment will need insuring, and the replacement cost on some of those pieces could be high, which will impact rates.
- Workers: The farmhands and workers of any kind that you hire to run your farm will impact rates because you'll not only have more liability employing people, but you'll also need to add a workers' compensation policy.
What Does Farm Insurance Cover, and What Does It Not?
When it comes to insuring your agribusiness, you should have a pretty good idea of what goes into it. Now you need to know what the policy will actually cover and what it won't.
Events your farm insurance generally covers:
- Accidents: This can be anything from coverage for fire and smoke to loading and unloading farm items, and more.
- Natural disasters: Volcanic eruptions and sinkholes. Typically, floods and earthquakes are covered under a separate policy.
- Weather events: Lightning, wind, hail, tornadoes and more. This is where multiple peril crop insurance that can cover your precious goods, as well as crop-hail insurance, come in so you can make sure your prized patch can weather any storms.
- Crimes and civil unrest: This is for theft and vandalism of your pumpkin patch. When the public is involved, it can happen, so you want to be sure your policy includes this.
- Collision or other death while transporting: You'll want to be sure your pumpkin patch policy has coverage for hayrides, tractor rides or whatever moving motored vehicle, machinery or equipment you may be hauling humans on.
What your farm insurance doesn't cover:
- Natural wear and tear of your farm's equipment, buildings or public used facilities.
- Non-working items or equipment due to wear and tear or general public use.
- Sexual misconduct usually is not an included coverage, but you may want to have your agent add it on or take out a separate policy for it. Whenever children are involved, you always want to be sure there is a policy in place for child abuse or any abuse that could occur on your farm's property.
Pumpkin Patch or Apple Orchard Liability Insurance
Running a pumpkin patch or an apple orchard is a great way to boost your income and create a welcoming activity for families in your community. But there are also a few risks that come with operating them. If you’re found to be legally responsible for causing bodily injury or property damage to other people as a result of running your farm business, you’ll have coverage under the liability portion of your policy.
Your independent insurance agent can discuss all the facets of your farm policies, making sure you've got the proper coverage in every area.
The Benefits of an Independent Insurance Agent
Independent insurance agents have access to multiple insurance companies, ultimately finding you the best coverage, accessibility and competitive pricing while working for you. And as your farm grows and your needs change, they'll be there to help you adjust your coverage, up or down, to make sure you're properly protected without overpaying. Find an independent insurance agent in your community here.
TrustedChoice.com Article | Reviewed by Candace Jenkins
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