When it comes to organising farm insurance, it can be difficult to know where to start. The first thing to remember about farm insurance is that it isn’t just one insurance policy, it is many.
With farm insurance, insurance companies offer around 10 or 12 policies under the banner of farm insurance. In the insurance industry this is called a bundle or pack. While these bundles may vary from insurer to insurer, there are some covers that are covered across the board as Trevor Madden, Principal Broker at the Gallagher branch in Ballarat, explains.
“Farm insurers write everything under a bundled policy,” Madden said. “They have a policy where everything is covered under one policy which works because you don’t want so many different policies if something should go wrong.”
Here is a breakdown of what a usual farm insurance policy covers. These are subject to change from different insurers and different policies within insurance companies but this offers an overview of what can be covered.
Home and contents
Many farm insurance policies also cover what insurers would call ‘domestic’ areas too. That is your home and contents. These can be covered for theft, fire or damage as a farm insurance policy offers more than just specific business coverage.
Your home will not be the only building on your property. Outhouses, sheds, and other farm structures are covered for replacement cover under this section of the policy. Like the home section, this can be covered for loss or damage.
One area that many people don’t realise they can be covered for is accidental damage to these farm buildings. Say you are unloading a wool press into your shearing shed and it drops off the back of the truck and damages the floor of the building. That can be covered under accidental damage.
This is basically vehicle or car insurance for family vehicles. Like a standard car insurance policy, this can be third party or fire and theft cover or top of the line cover.
You’ll know better than anyone that your farm vehicles aren’t cheap. Whether it is a tractor or quad bike that can be covered under this section of the policy. Also covered here is any farm machinery you own or lease.
Another lesser known section of coverage does not mean just simple breakdown of farm machinery, this cover related to break down of large electric or diesel driven water pumps, or milk vats including spoilage of produce.
Livestock, fencing and hay insurance
This section provides protection for your livestock and feed from fire, and some theft cover. Fencing can be insured on a first loss basis which stops the worry of any underinsurance clauses from the insurer.
This covers you for loss of income if you are unable to work due to an accidental injury or an illness. With many farmers filling many roles within their business, this can be key to ensure that you and your family can survive in the event that something happens to you.
Public & Products Liability
Perhaps the most important section of all, and it is a good idea to take the maximum cover available. This covers you for resultant damage to properties from escape of fire from your own property, damage to vehicles from staying stock on the public road, also any accident that a third party suffers on your property. This can also cover product liability for all produce grown and sold on the farm.
One of the most important sections of a farm insurance policy is also one of the most misunderstood. Business interruption, or farming interruption as it is sometimes called, can help your business survive some of the biggest challenges it faces. Business interruption insurance can come into play if you are unable to trade due to fire. This can help cash flow in the aftermath of a disaster and gives you a chance to rebuild.
You can include other sections on your policy if you require cover for additional items. Say you’ve got a boat or a caravan that you’d like covering, you can work alongside your broker to include this as part of your farm policy. This helps to keep all of your policies under one roof, with just one premium.
With so much to understand from even a basic farm insurance policy, and with policy documents sometimes running into the hundreds of pages, this is where a broker can help.
Madden, who has helped thousands of farming clients, said that for many farmers, using a broker can help point them in the right direction for their business through a variety of tailored covers for their specific needs.
“We have got a great broker network with great offices and people around Australia,” Madden said.