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:
- Farm buildings
- Vehicles
- Equipment and machinery
- Livestock and produce
- Liability
- Business interruption
But what exactly does that mean? Let's take a closer look at each one.
Farm buildings
Generally, the two types of buildings on farms are residential and outbuildings. Because some farm work can be performed 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, ensure it's included in your policy.
Farm outbuildings, like barns, also need property coverage. These buildings can be older or erected before current building codes, and replacing them can be costly. Even new buildings need the right coverage to ensure you are adequately protected. The right coverage can prevent a minor issue from becoming more significant.
Discover how we can help protect your farm and the equipment you rely on.
Vehicles
The proper type of coverage is vital, whether it is the farm pick-up truck, minivan, or classic car that you have on the farm. Depending on what you're using the vehicles for, you might require both personal and commercial insurance. Vehicles for personal use only can be covered under your regular car insurance policy, but anything that is used for farm work needs to be insured 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.
Basic farm insurance covers the cost of repairing or replacing the damaged property if your machinery is damaged due to fire, physical damage or theft. You can also purchase additional coverage to insure against other types of loss.
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 ensuring you are insured for the full value is essential. Not only does that protect your equipment, but it also protects your revenue by limiting out-of-pocket expenses. Depending on how critical a piece of equipment is to your business, you may 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.
Livestock and produce
Different types of coverage are available if you have livestock on your farm, like cattle, pigs, or horses. 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 can help to protect your profits.
Liability
All businesses need liability coverage, but farms have additional inherent risks. Should someone hurt themselves while on your property, liability insurance can help with financial damages and protect you in case of any litigation.
Obtaining the proper liability coverage for your needs is crucial. While general liability coverage will work for many operations, farms open to tourists or selling at farmer's markets might require more complex coverage.
Business interruption
This coverage will give you an income if something interrupts your farm's business. This includes mechanical breakdowns, fire, and flood. Any of these events could result in a business closure for many months or, in extreme cases, even years. This coverage can help with the costs of getting your business back up and running after a loss.
Today's farms are sophisticated businesses; ensuring you have the necessary coverage requires specialized knowledge and experience. Our dedicated team of agribusiness experts understands 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 insuring your equipment and machinery or your livestock and produce, the right coverage offers peace of mind and protection for everything your business relies on.
