Take advantage of the lull before calving to make sure your insurance policies work for you

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Renewing your insurance isn’t usually given much thought other than acknowledging the change in policy premium, but revising your coverage could have major business benefits.

Take a break before it all starts with calving and field work to determine if you are properly insured.

Being well insured means having the desired cover for the risks related to your activity and being insured for the right amount. Separating the different types of policies available can help identify why you need coverage.

Agricultural buildings

Let’s start with farm buildings – are all your farm buildings currently covered?

Over the years new sheds may be built or extensions to existing farm buildings – these must be added to your policy or will not be insured.

Similarly, if you have leased a farm, have you taken out appropriate insurance for these buildings?

The type of coverage available for farm buildings can include fire and storm damage. Some insurers will refuse to cover agricultural buildings beyond a certain age or when these buildings show signs of rust and deterioration.

Finally, regarding the buildings, are the buildings insured for the correct amount? The cost of constructing farm buildings has skyrocketed over the past year, with cladding prices nearly doubling and concrete prices rising 15%.

In the event of underinsurance of agricultural buildings, the compensation in the event of a claim will be reduced proportionally.

Let’s take for example a building insured under fire guarantee with a value of €50,000 which is damaged by fire. Damage caused by fire can be repaired for €20,000.

An expert assesses the buildings as having a total replacement cost of €100,000. As the damage represents 20% of the total replacement cost, the indemnity will be based in proportion to the amount insured, ie the indemnity is capped at €10,000, or 20% of the insured value.

When a farm building is insured, remember that its contents are not.

Separate insurance coverage is required for milking equipment and tanks, straw and machinery stored in farm buildings. Types of coverage may include fire and lightning insurance.

For milk suppliers, insurance can cover product liability.

Public liability

Civil liability can cover claims resulting from the straying of animals or following personal accidents on the farm. The civil liability taken out by a property owner can in certain cases cover cases of a tree falling on the public highway.

On this last point, clarification should be sought from your insurer as to its position vis-à-vis rotting trees.

With regard to agricultural machinery, agricultural tractors can of course be insured fully, or third party only or including fire and theft as an option. A glass lid can be added, with varying amounts of excess. The lower the deductible, the higher the premium to be paid. Some insurers will add a charge in the event of a glass cover claim, others will not.

A key cover can also be added, which is particularly useful for modern tractors and machines where the key can be chipped.

Keep in mind that tractors may not be covered by theft insurance if the keys are left in the vehicle. Also keep in mind that just because the tractor is insured doesn’t mean the attachment is.

In the absence of insurance for the tools, the insurance indemnity will only cover the tractor. Coverage may be obtained for farm tools and portable equipment, but such coverage may only be granted if such equipment is kept in a locked shed in a residential farmyard.

Livestock

Additional insurance can be requested for livestock. Coverage may include stock in transit, coverage against lightning and electrocution, and coverage for stock lost due to livestock slat failure.

The employer’s liability may include regular salaried staff and an element for casual labour. Some policies require staff members to be named, and in such cases ensure that any staff changes are updated accordingly.

Some insurance policies may cover contractors, such as shed painters, while others may not.

Knowing what coverage you have is the starting point, then adjusting your coverage to suit your needs. When comparing prices, check that the same level of coverage is offered.

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