Are you making your first foray into farming and feeling uncertain of the insurance requirements? Are you questioning whether your existing policy fully meets your needs? Or perhaps you aren’t even sure whether your circumstances warrant farm insurance at all?
Agricultural and rural insurance specialist Sean Dugdale, a Commercial Account Executive at Alan Boswell Group, answers your key questions.
Q: What is farm insurance?
A: In layman’s terms, farm insurance is insurance arranged for individuals or companies in the agricultural sector. It’s designed to protect buildings, equipment, stock and staff, and in most cases will be made up of a selection of insurance products chosen to meet the customer’s specific requirements.
Q: Do I need farm insurance?
A: Anyone involved in agricultural work could have a need for farm insurance, whether they run a hobby farm, smallholding, larger working farm or country estate.
Q: What covers usually make up a standard farm insurance policy?
A: A standard farm insurance policy (or policies) will usually cover a wide range of aspects to ensure you are protected against all potential risks. This means including covers such as farm buildings insurance; farm contents (e.g. machinery and plant, arable ‘inputs’ and growing crops, computers, mobile phones, GPS/satellite navigation equipment etc); livestock; vehicles; business interruption and loss of revenue; employers’ liability; public and products liability; directors and officers liability; personal accident and sickness; environmental impairment liability; goods in transit; commercial legal expenses; and household buildings, contents and personal belongings.
Q: Are there any add-ons I might need to consider?
A: There are various other bespoke covers available that can be added on to a standard policy. For example, livestock disease cover; fatal injury to livestock; hail damage cover; engineering cover for renewable energy plant such as biomass boilers, wind turbines and solar panels; special events insurance if your land is used as a corporate, wedding or festival venue; and key man insurance, which protects a farm business against financial loss resulting from the sickness, injury or death of an individual who is key to its success. Additionally risk management services should also be considered.
It’s important to discuss your circumstances with an independent insurance adviser to find out whether or not you would benefit from any add-ons. They can prove hugely valuable if relevant to your business, but there’s no point in paying for cover that you’ll never use.
Q: Does farm insurance cover vehicles and equipment?
A: Yes, standard farm insurance policies should provide cover for anything from a single quad bike up to a large fleet of farm vehicles. Cover can include commercial, agricultural and private vehicles, as well as machinery, GPS equipment, trailers, attachments and implements.
Q: Are there any common exclusions I need to be aware of?
A: All policies will have exclusions, but these should be pointed out to you and carefully reviewed before you sign on the dotted line. Two of the most common exclusions are damage caused by wear and tear and damage to third-party property that’s in your care, custody or control.
Q: How much does farm insurance cost?
A: It’s very difficult to answer this question, because premiums vary according to each policyholder’s individual circumstances. The cost will depend on the size of your farm, the level of cover you select and your claims history, among other factors. But, as a rough guide, smallholding policies can be available for as little as £500 per year, while the largest farms and country estates will pay in excess of £100,000. A good attitude towards risk and health and safety will help to keep insurance premiums down.
Q: How should I go about finding the right policy for me? Or checking that my existing policy is still adequate?
A: Whether you’re just starting out, changing/expanding your business, or simply looking to review your current levels of cover, the first step is to find an independent insurance adviser with knowledge and expertise in farm insurance.
Each farm and smallholding will be unique – especially these days, as the public’s interest in self-sufficiency grows and agricultural businesses become increasingly diverse in order to remain profitable. An experienced insurance broker will be able to identify your specific needs and advise you accordingly. He or she will also have access to several markets in which to search for the most suitable policies.
It is important to choose an adviser who really cares about your business and makes the effort to understand how it works and what risks it may face. At Alan Boswell, for example, we try to visit our clients, speak to them face-to-face and take a tour of their farms. This allows us to identify exactly what insurance requirements are needed through first-hand experience, and find a comprehensive policy or policies to fulfil those needs.