What are the benefits of farm insurance?

Farming is a challenging profession. Whether you’re only just starting out or have many years of experience in the field, if you own a farm, you know how quickly things can go wrong. From the …

Farming is a challenging profession. Whether you’re only just starting out or have many years of experience in the field, if you own a farm, you know how quickly things can go wrong. From the loss of revenue from the forced sale of livestock to the damage or destruction of tools and business equipment to environmental pollution from chemical spills, there are a range of risks and exposures to be aware of when managing farmland.

Getting farm insurance is a good way of managing or reducing risk for your business. Not only is it a great way to prevent loss on your farm, but you can also have peace of mind knowing that you don’t need to pay out of pocket to get things up and running again.

There are around 280,000 farms in Britain, taking up 72% of the land, which means that farming is a competitive industry. This means you can’t afford to have an accident or vandalism or broken down equipment stop production for long.

A standard farm insurance policy is a great place to start to make sure that you are prepared for any problems that your farm may face.

What are the benefits of farm insurance?

Farm insurance offers farmers protection against financial loss for livestock, farm products, farm equipment and machinery, and loss of revenue after an interruption to your business. It can be tailored to your farm’s specific needs, whether it is a smallholding or a bigger commercial farm.

In addition to this, farm insurance includes liability cover, which deals with claims others might make against your farm in case of an accident or injury. This is particularly important if you have employees working on your farm or members of the public walking on your land via footpaths or visiting during open days.

In this article, we’ll explore the types of things that this type of insurance can cover in further detail.

What does farm insurance cover?

Farm insurance covers a range of things including:

Livestock and farm products

With livestock and farm products cover, you are protected against fire damage or a natural disaster, such as storms and flooding, that affects your livestock and any seeds, grains, and other products.

However, you should note that this cover does not extend to crops. Instead, it is only for farm products such as milk and goods in transit.

Farm equipment and machinery

Farm equipment and machinery cover protects you against any repairs or replacements needed for your equipment that is damaged or destroyed by a fire or natural disaster.

However, the cover does not include any usual wear and tear damage or accidental damage caused by malpractice. If you use your equipment and machinery recklessly, you will be liable for any repair costs.

Liability cover

There are different types of liability cover that farm insurance might include. For example:

  • Environmental impairment liability
  • Public and products liability
  • Employers’ liability

Environmental impairment liability is an insurance solution for the environmental damages that you may cause through your farming activities. Even if that damage is unintentional, accidental pollution or gradual pollution can still happen. As such it is advised to protect your farm incase of these environmental accidents.

Public and product liability cover protects you if you cause damage to a third party whilst they are on your farm or interacting with your products. This policy includes cover for injuries to another person, damages to their property, payments for their medical expenses as well as legal costs if they decide to sue.

Employers’ liability works similarly to public and products liability and is a legal requirement if you hire anyone. You could be fined £2,500 on a daily basis until you purchase this insurance. The policy covers any medical expenses for injuries suffered by your employees while at work.

What types of insurance cover can you get for your farm insurance?

You can opt for either blanket cover or individual cover, depending on the work you do on the farm.

Blanket cover is also known as unscheduled cover. As the name suggests, it covers the main areas of your farm: livestock, farm machinery and equipment, as well as dwellings.

Individual cover is also known as scheduled cover. You can use individual cover to insure specific things on your farm and assign them different levels of cover. For example, of you own a herd of dairy cattle you may want to insure them under a particular policy.

What policies can you get for farm insurance?

There are many farm insurance policies you can get, including but not limited to:

  • Farm fleet insurance
  • Farm or commercial auto insurance
  • Farm diversification insurance
  • Crop insurance
  • Growing timber insurance
  • Livestock disease insurance
  • Hired-in plant insurance
  • Environmental impairment liability insurance
  • Employee liability protection
  • Fencing insurance

Farm fleet insurance

You will likely have multiple vehicles running on your farm. Farm fleet insurance is an ideal option to cover all your vehicles under a single policy.

If your vehicles get damaged or stolen, the cost of repairs and replacements will be covered by this policy. Farm fleet insurance often covers windscreens and glass too, so you won’t have to pay for damaged windscreens out of your own pocket.

Some of the vehicles and agricultural machinery that are covered are:

  • Combine harvesters
  • Tractors
  • Private cars
  • Commercial vehicles
  • Farm quad bikes

Farm or commercial motor insurance

Farm or commercial motor insurance or auto insurance is a policy that covers your farm’s assets as well as its vehicles. As opposed to farm fleet insurance, this policy protects your buildings, including barns and farmhouses, and other assets as well. If your vehicle damages one of your buildings, for example, you will be covered for both the vehicle and the damaged building.

Farm diversification insurance

Farm diversification insurance covers your business if you want to diversify the activities on your farm. Diversification can allow your farm to earn additional revenue, but the new revenue streams require their own insurance policies.

Farm diversification insurance will cover you against financial loss for any non-standard farm activities you carry out on your farm. Some popular choices are fish farming, alternative livestock or livestock produce and non-food crops.

Crop insurance

Crop insurance covers loss of income if natural disasters such as storms and floods or fires affect the products you grow on your farm. You will need to purchase crop insurance separately from your farm liability insurance or make sure that your insurance package covers it.

Growing timber insurance

Buying agriculture insurance does not mean you will be covered for every type of crop you grow. Growing timber can take a lot of hard work and resources, so it is worthwhile having a specific insurance policy to protect it.

The growing timber insurance policy covers:

  • Damage to felled timber
  • Management felling
  • Damage to walls, fences, gates
  • Site clearance
  • Property owner’s liability
  • Fire damage
  • Storm damage

Livestock disease insurance

If raising livestock is part of or the main component of your farm business, an insurance policy to protect you against loss by disease might be a good option.

Our world is full of unexpected diseases and outbreaks, which is why you can never know when your livestock or poultry might fall ill or die.

Since your basic farm insurance will not cover diseases, this policy can provide peace of mind that you are adequately protected against an outbreak of livestock disease.

Hired-in plant insurance

Hired-in plant insurance covers you against financial loss if any farm machinery or vehicle you hire gets damaged. This cover typically includes accidental damages such as collisions.

Hired plants are particularly popular with smallholdings that only occasionally need larger machinery to get certain jobs done. This can be a really efficient option for farms that do not need expensive equipment for everyday tasks.

Environmental impairment liability

Environmental liability protects you against environmental damages that you are liable for. Insurance companies do not always offer environmental impairment liability insurance, even though ecological damage is a high risk if you run a farm.

Some insurance brokers offer environmental impairment liability cover for around £2m cover. Environmental liability protects you against environmental damages that you are liable for, including cover for gradual pollution.

Employee liability protection

When you start hiring any workers on your farm, you must get employee liability with cover worth a minimum of £5m. As with any business, this is your employee safety net. Employee liability protection covers your farm business financially if any of your employees get injured at work.

You should also note that anyone who helps out on your farm is considered a risk, even if you do not pay them. The only people who will not need cover are family members and contractors who should be covered by their own insurance.

Fencing insurance

Fencing insurance is rarely part of a standard farm insurance package. Still, it can be a valuable policy to include, especially if you have a significant amount of fencing across your land.

Fencing insurance covers the price of repairs or replacements for your fence. You can speak to your insurance broker or insurance provider to get this included in your cover.

What is hobby farm insurance?

Hobby farm insurance is a home insurance package that covers your small farm against financial loss. Typically, you would run a hobby farm for pleasure and not to make a profit.

Although a hobby farm does not constitute a business, it is good practice to have it covered by insurance should anything happen. Others might get injured on your property, by farm equipment and vehicles, or you might be liable for environmental impartment claims.

Hobby farm insurance can become part of your regular home insurance. As long as your farm is under 250 acres and not commercial, you can enjoy your hobby with peace of mind.

FAQs

How much does farm insurance cost?

The price of your farm insurance will depend on many factors such as location, size, the farm activities, and how much risk they pose.

There is no set fee for farm insurance as it will depend entirely on your farm needs and activities. You can reach out to your insurance broker for guidance on building the best possible insurance plan tailored specifically to you.

How can I get a better quote for my farm insurance?

If you are trying to get a better quote for your farm insurance, there are a few things to keep in mind.

Using insurance brokers

You can buy farm insurance by talking to insurance brokers.They have access to many insurance companies, as well as great relationships with them. An insurance broker can negotiate a better premium for you.

Insurance excess

When you increase the insurance excess, this can make the premium more competitive.The excess is how much you pay to make an insurance claim and have your costs covered. If you opt for a higher excess, you can benefit from a better price on your insurance. However, also keep in mind your excess should be affordable in case you need to make a claim.

Current agricultural regulations

Insurance providers look at whether your farm might pose an increased risk of accidents, environmental damages, and other risks. If you meet all the current agricultural and farming regulations, you can reduce the risks to help get a better insurance deal.