With the warm weather comes a ripening crop. We are approaching harvest very quickly, in fact there were some combines out in the field already.
Every harvest has potential risks, and we need to make sure that those risks are either managed properly or that you have coverage in place to protect yourself in the event of a loss. First of all, with the warm weather and dry stalk, there is a potential fire trap in the combine. From the risk management side, you should have a fire extinguisher nearby at all times, and a water truck on the field, wouldn’t be a bad idea either. As for insurance, please review your equipment list with us and look over the values on that equipment, to make sure it is up to date. We would hate to have a loss and realize the equipment wasn’t listed or it was underinsured.
It is important to make sure you have loss of use coverage on your policy for your machinery. Loss of use coverage is money you can use for a rental, if your equipment has had an insurable loss. For example: You have an ingestion claim on your combine that has resulted in damages of $25,000. The ingestion damage is covered under your insurance policy on your combine, however, you need another combine to continue with harvest while this is being repaired. If you have loss of use coverage of $10,000, you can use this coverage to rent a combine during the time your combine is being repaired. There are different limits you can buy, we used $10,000 as an example. Please contact our office if you would like to add this coverage or more information on it.
If the conditions were right this year, you may have a bumper crop. Once that crop is in the bin ready to be transported; we need to make sure that your investment is covered. Insuring your threshed grain should be a priority to prevent losses due to theft, fire, windstorm, and upset and overturn during transportation. Your grain should be insured to a minimum 80% of replacement value to avoid co-insurance.
Today’s bins are getting larger and more complicated. With automatic bin sweeps, aeration fan systems and other technology; we need to properly insure these structures. For risk management, we would suggest anchoring down your hopper bins to make sure they are secure, even if there is or isn’t grain in the bins. This will also result in a rate reduction for the insurance premiums on those bins. With all of the fixed equipment in the bin, “equipment breakdown” coverage will help cover losses due to a sudden and accidental mechanical failure. And again, when insuring the bin, we should insure it for the replacement value, that way if there was damage due to fire, wind or collision from moving machinery, you are eligible for full value of the bin if replacement or repairs are needed.
The old farm saying is, the season is not over until the grains in the bin. Some might say until you have a cheque in your hand. There are a lot of variables on the way, and if we can protect your investment through that process, you will sleep better at night.