During the farming season, there are many things going on. When it’s spring, you are getting the harrows, drills and rest of the equipment ready to hit the fields, along with the seed and fertilizer. Then after that is in the ground you have to get the sprayer and chemical ready. Then you have a short window before the peas are yellow and you are starting the harvest.
There are so many variables to running a farm and the season is so busy and hectic that something like your insurance policy can fall through the cracks. Generally the big items are remembered: The house, Shop, Bins, Barns, Equipment, Grain, Cattle, Etc. However, we want to touch on a few items that may be forgotten.
If you have a dairy or poultry farm, a big coverage is Farm Expense & Farm Income Coverage. This coverage pays for your expenses if you have a claim that results in a devastating loss which causes your farm to be inoperable and unable to generate an income because of the claim. For example, your milking parlour burns down and you are unable to milk your cows or your cattle have been lost in the fire. You may need to transport your cows to another farm to milk your cows while you rebuild your parlour. There are many different kinds of extra expenses that can be covered under this endorsement. It is a farm version of a “business interruption” policy. You may still have mortgage payments and payroll to keep employees, but you may not be making as much income or any at all. This plan is here to protect you from such a loss.
Another forgotten coverage is Debris Removal. Many people think of the replacement cost of a shop or barn, but they forget on what it would cost to tear down, excavate and haul away damaged materials and buildings. This my be a large job if you don’t have the equipment and manpower to handle the project. Most insurance companies recommend you add a minimum of 5% of the replacement value onto the building value to include for these costs.
Equipment Breakdown (also known as Boiler & Machinery Insurance) can be purchased on your farm policy for your farm outbuildings. Equipment breakdown coverage is not Machinery breakdown coverage. This is not designed to cover your farm machinery, but rather the fixed equipment in your farm outbuildings. This would be like: Boilers, Aeration Fans, Automatic Scrapers, Milking Parlours, Automatic Ventilation Slides, Compressors, Air Conditioners, Electronic equipment, etc. This coverage would apply to any sudden and accidental electrical or mechanical failure to that equipment fixed to the buildings. This coverage is important to cover the loss of any equipment in the claim, but it also removes any loopholes typical to an insurance policy. For example, you have a sudden mechanical failure in your heat exchanger in your furnace. The furnace catches fire and the shop burns down. The shop would be normally covered on your farm policy for the value it was insured for, however, they would exclude the damage to the furnace caused by the mechanical failure. This could still end up costing $5000 or whatever it would cost to repair or replace that furnace. By having this equipment breakdown coverage, the entire claim would be paid for, and you would only have to pay one deductible.
There are many little coverages that we recommend, but you may not have seen value in them when you first purchased your policy, but may now be relevant to you. A few of these are: Loss of use coverage (Farm Machinery), Volunteer Fire Fighting Coverage, Pollutant Clean-up and Removal, Tack Equipment, Vet supplies, Milk Contamination, etc.
Please give us a call if your operation has changed, or if you would like to review the other farm coverage operations related to your farm operation.