What is farm insurance?
Farm insurance is an insurance policy that covers the risks related to the farming business. A farming or agriculture business faces many types of risks. The likely risks include damage to the farm, damage to equipment, loss of the crop or livestock, and more. Markets Insider states that there are about 2 million farms in operation in the US. Data also shows that number of operating farms is decreasing. Farm insurance can help people hold on to the farming business.
In this article
Why do you need farmers business insurance?
Like any other business, your farming business also has priced assets that need security. To protect these assets, you need insurance. It is a highly flexible policy where you can choose your coverages as per your needs.
For example, if you grow commercial crops, farm insurance can help you secure your grains produce. Farm and ranch insurance would cover any losses you might suffer due to damage to your goods.
Overall, having farming insurance will allow you to focus on your business .
Who needs farm and ranch insurance?
- Crops growing business
- Hobby farming
- Cattle and livestock-based business
- Cotton and field crop growing business
- Dairy farming business
- Breweries, vineyards, and berries growing business
Your farming business is dependent on the safety of many basic factors. These factors include:
This includes the farm, ranch and any additional structures in the house property. For example, if you have a barn or stable in your backyard, you can buy farm insurance to protect it. In this way, you can also save additional living expenses. Additionally, the policy also covers commercial buildings used for farming business. For example, you can cover a garage that you use as a godown.
If you are running a business that is dependent on livestock, you need livestock insurance. For instance, if you take care of horses in a stable for business purpose, you need to insure them as business assets.
In most states, businesses have a necessity to get insurance if they have more than two employees. Farm insurance will give you farm liability coverage for your employees. You can include workers compensation and general liability insurance to your policy.
Can you get insured for hobby farming?
Hobby farming is when you work on a farm, but it is not your main source of income. Hobby farmers do not have any employees and farm at single farms. However, you can get coverage for hobby farming through a hobby farm insurance.
If your production is limited and you are selling it in a farmer’s market,you can buy hobby farming policy. Small farm insurance can also include such kinds of farms. According to the United States Department of Agriculture, family farms account for nearly 98 percent of U.S. farms and make 46 percent of the value of production. Therefore, getting hobby farming insurance for your farm is a wise option.
Policies that fall under agriculture and farm Insurance
Workers Compensation Insurance:
Workers compensation insurance covers losses related to treatments, lost wages, and other employee-related losses.
According to the Bureau of Labor Statistics, there were 574 fatal injuries in 2018 in the agricultural and farming industry. Worker’s compensation insurance provides coverage for losses that businesses face due to such injuries and deaths.
Business Owners Policy:
The business owners policy includes risks from losses related to business operations. BOP is a combination of commercial property insurance, general liability insurance, and business interruption insurance.
· Property: This will cover any kind of property that you own or rent. The property could be farms, ranch, warehouses, equipment, etc. Specifically, farm property insurance will cover this.
· General Liability: This includes losses from third-party cases for damages that happened in your property. For example, if your tractor hits another person on your farm, you could get coverage for legal fees.
Commercial Property Insurance :
Commercial property insurance covers the property where you conduct your business and are owned by the company. Also, this policy covers tools used for business.
As an agriculture and farm business depends entirely on property, this policy is essential for your business. In farm insurance, this policy covers property damage by named perils to farms and farm personal property.
Commercial General Liability Insurance:
General liability insurance is a policy that covers damages to third party property. CGL covers damages from bodily injury, or any losses arising from accidents during the course of your work. In case of farming business, this policy can be farm liability insurance.
For example, people might get direct exposure to your fertilizers and fall sick. A commercial general liability policy will cover you against the legal fees and loss you face.
Commercial Auto Insurance
- On-site accidents: This includes accidents that happen in farms or ranches. The vehicle used on-site is mostly tractors.A policy that covers tractors is farm tractor insurance.
- Off-site accidents: This includes road accidents that occur during transportation.
Inland Marine Insurance:
Inland marine insurance covers losses from theft, or other damages that might happen to tools or goods during transportation. Also,inland marine policy will cover the loss of any equipment damage while using it for business operations. .
For example, if a vehicle carrying dairy products gets hit, you might suffer losses. Inland marine policy covers this loss.
Ocean Marine Insurance:
Ocean marine insurance covers the losses to the assets of the business while on transit using marine transport. For farming business, ocean marine policy will cover the losses if your crops are damaged during shipping on a freight.
Commercial Umbrella insurance:
A commercial umbrella insurance provides an extra margin of safety. This policy covers the amount of loss that exceeds the coverage limit of other commercial policies like auto policy or general liability.
Farm insurance policies have some exclusions. You might need to cover them through endorsements. Some of the common exclusions are:
- Fencing: Fencing of farms is a common exclusion. You can add it to your commercial property coverage if needed.
- Machinery and equipment: Farming insurance covers machinery only for some listed perils. Due to technological advancements, machinery coverage has become costly. You need to add on listed risks if you want full protection.
- Loss from incidents like fire: Generally, damage from fire is an exclusion in a farmpolicy because of added sensitivity .
What is the cost of farm insurance?
There is no standard cost of farm insurance. This insurance includes businesses ranging from farming to livestock, dairy, and many more prospects. Therefore, there is a personalized cost quote for each insurance policy. Some of the factors that influence the price of this policy are: