Farming and agriculture is the most important industry in the United States and the world. Farmers bring food to household tables, restaurants, hospitals, and other farms. Running one poses many risks and hazards like any other business out there. So, you have to be prepared for any untoward incidents that may arise. A study last year stated that 2 million farms are in operation. Only 85% are insured. The remaining 15% are the ones that are more vulnerable to losses caused by many factors. These farms are usually managed by either young-generation farmers or those that keep it old school. You need, of course, an insurance policy for farms.
Protecting your business is a farmer’s main responsibility. However, you must also consider that other things may also need protection, like your family and customers. And other farmers that live nearby.
This article will help you understand the importance of a farm insurance policy. This will not just protect your business. But, it will also cover the costs of any damages caused by accidents in or out of your property. Since there are different types of coverages, let us uncover them individually to choose the appropriate setup from which you can most benefit.
Identifying The Types of Insurance Policy for Farms:
Personal Insurance
It works almost the same as standard insurance that every corporation or business provides its employees. It covers many aspects to support their employees in times of need. Some also cover early and full retirement packages. Since farmers normally run their own businesses, here are some examples of insurance that you might want to include.
Life Insurance
Working on the farm every day can be dangerous. Especially if heavy equipment such as tractors, plows, harrows, and baler is a part of your daily workload. So as the owner of the farm, you have to make sure that your family can still sustain to run your farm in the event that you die untimely.
Disability Insurance
Helps you avoid financial difficulties if you experience any accidents that cause you to lose your ability to do your daily job completely. This type of insurance will provide enough income while you won’t be able to work.
Health Insurance
We know for a fact that it is extremely difficult to find affordable health insurance. Especially if you are below 65 years old and a seasonal employee, usually, a farmer must get health care coverage from an employer or purchase private or personal insurance.
Dental Insurance
Although you might think that dental issues don’t have anything to do with your farm, you got it all wrong. A simple toothache sometimes is a sign of coronary health deficiency. Yes, you heard it right. Dental and coronary health can sometimes be correlated. Frequent dental check-ups preserve your teeth and keep you healthy.
Liability Insurance
When one of your employees gets injured and cannot work, you are still expected to pay for his medical expenses. The number of days he is off work. This protects you from losing your farm due to overspending on medical bills or legal defense. Compensation on legal fees also included those caused by an accident. This type of coverage is vital in securing your business from untoward incidents.
Product or Produce Liability Insurance
Since a ranch or farm’s primary source of income is its production, this will protect you if any of the products you sell cause harm or illness to a consumer. This is very important. Especially if you do a farm-to-market type of selling since you are the one who transports and handles the produce. In the presence of third-party logistics, different insurance coverage needs to be discussed.
Workers Compensation Insurance
This is mandated by law, and different specifications vary depending on which state you operate. This insurance covers your employee’s medical expenses whenever they get injured. It can save you a lot of money and protect you from lawsuits.
General Liability Insurance Policy for Farms
This coverage suits farmers offering land tours or in-the-house or on-site market activities. It covers the medical expenses of any injured visitor, consumer, or client within your property.
Commercial Vehicle Liability Insurance
Protects from any liability risks. If one of your farm vehicles happened to cause injury to another person, regardless if it is you. Another person driving the vehicle. This also covers damage to public and private properties.
You may also include all of your farm vehicles under one insurance policy.
- Non-Owned Vehicle Liability Insurance – When you hire someone to transport your products or any items to and from your property. Also, if you allow your employees to use any vehicle, you do not own for business purposes out of your own profit. Then this insurance policy will protect you from any liabilities if any accident happens when carrying out the job.
- Business Property Insurance – Insures any building structure inside the property, including but not limited to Your actual home, stables, fencing, barns, silos, coops, and even a tiny irrigation waterway. You know how expensive these structures are and the time allotted to build them. Hence, you might consider having them insured if any perils destroy them.
Yes, this will not protect the structures physically, but it will somehow cover the cost of any reconstructions or repairs that will surely drain your savings.
- Asset Insurance – Every business has its own assets, whether living or non-living. It is best to ensure that all of these are insured so that if something happens to them, you can still get something to help you replace these valuable farm items. Losing any equipment you use in your everyday operation will be devastating. The said insurance doesn’t just cover equipment, it includes livestock and crops, which also has blanket and individual coverage, so it is a farmer’s utmost interest to secure this type of insurance.
- Equipment – plows, tractors, water irrigation pumps, and spreaders are just examples of items this type of insurance can cover.
- Livestock – domesticated animals, cows, cattle, and some exotic animals can be included in your policy. This is important so you will not have to worry about replacements in case of any accidents involving these animals that result in losses.
- Crop Insurance – if your main product involves crops, securing this type of insurance is imperative as it protects you from potential losses. If your product gets damaged by natural perils such as fire, lightning, drought, etc. This will give you a peaceful state of mind knowing that if any of these events happen, you have support on funds in purchasing new crops.
Additional Information about Insurance Policy for Farms
For example, an incident happened last year when a farmer was mid-way through harvesting his produce. A family broke into his barn, where he kept wood chips for smoking steaks. The trespasser only intended to stay for the night and leave at dawn.
However, one threw a lit cigarette to the side of the barn on their way out. This started a fire that engulfed the whole structure. It damaged the tractor inside it and a few livestock. Two months before that incident happened, an insurance agent contacted them to offer services. But since they did not even consider at least hearing out a proposal and turned the agent away. They lost 36% of their assets and around 27% of their profit. So don’t be afraid of asking questions about how insurances work or how much it costs because there is a reason why insurance is created.
Contact us for Help
Being aware of the things that help you run your farm or ranch is a good thing. But understanding that a certain help will always be at your side if you have insurance gives you an upper hand and peace of mind. That said, a farmer or ranch owner should know about the different types of insurance you can get to identify what you need the most and where you can be more beneficial.
Getting insurance might give you the impression that it is an extra cost; however, you also need to consider that in the farming industry, many challenges may hinder you from generating profit from what you have already worked for.
To maximize your insurance coverage, discussing it with an authorized insurance agent is important so the best possible solution can be provided. Call us at Team AIS in Denver, CO, if you have any questions or clarifications.