By Aaron Bickle, CEO – Bickle Farm Solutions
If you’re sitting in your farm office, I want you to reach into the cupboard, pull out your farm insurance policy, and dust it off! The folder full of fancy insurance jargon isn’t just a stack of paper, it’s your “Securityto continue cultivating. If the goal is to pass the farm on to the next generation or keep the assets you’ve built so you can maintain your lifestyle, your farm insurance plan might as well be bulletproof, n ‘is this not?
Just like a house, barn, or grain complex, a good farm insurance plan starts with a good foundation by a “builder” who is not only experienced, but a builder who knows his trade. A master builder uses top quality materials, top-notch suppliers who are responsive, and a team that cares and takes pride in their work. As we dive into building a strong farm insurance plan, I want you to think of your agent as the builder, your insurance company as the seller, and the agency team as the builder’s team. .
A strong agricultural insurance plan starts with an independent agent who does agriculture – not an agent who casually sells agricultural insurance, but a agricultural insurance agent. Make sure the agent you choose has a relationship with at least two financially sound insurance companies that are 100% committed to farming with years of experience supporting farmers. The reason is simple: options. While it is important and certainly recommended to retain an insurance company, it is equally important that your agent has a “B” plan or even a “C” plan in case of a bad claims experience, product availability or coverage, or pricing that’s completely out in left field. The reality is that independent agents with more agricultural clients who represent multiple agricultural carriers have more flexibility with pricing and coverage data; this means they are better equipped to navigate the agricultural insurance market for their clients.
As your agent works with you to gather information about your operation, your goals, your risks, and how to best manage those risks, it’s important that your insurance plan is designed to give you the best chance of WINNING. But what does winning mean? This means that your policy should anticipate the “what ifs” even though the likelihood of those “what ifs” may be low. That means having the right coverage so your policy can respond and you can keep farming. Any good agricultural insurance plan should be based on the following fundamental coverages:
A farm umbrella – Simply put, an agricultural umbrella is an added layer of protection for your farm business and is arguably the most cost effective way and the best money you can spend to protect your assets in the event of a lawsuit. If you do not currently have an agricultural umbrella, please schedule a meeting with your agent to discuss what coverage is right for your operation.
Global coverage – coverage = better 99% of the time – not quite the same as “set it and forget it”, but it’s a close second that helps create some wiggle room in your plan agricultural insurance. Simplify your plan by adding comprehensive coverage for your farmland, equipment and grain complex. Here’s why…
Areas of coverage – most insurance companies require that all agricultural land you own and lease be listed on your farm insurance policy for liability to apply to that location. While land picked up during the policy term is usually covered by most carriers, what about places you’ve been farming for years that still aren’t on your policy? It’s a good idea to remove the “grey” area and cover your acres so that you know absolutely that every agricultural field you cultivate is 100% covered.
Cover equipment – Once you are done dusting off your font, return to the gear page where all your gear is programmed. We will assume that your equipment is insured for its actual cash value. You will most likely find that equipment you sold years ago is still listed, maybe something is missing, but pay close attention to the coverage amount of each piece of equipment. The amount you see is the maximum you will receive if this machine was destroyed. In this gear market, that’s a problem, because you won’t get the amount of money the machine is worth unless you’ve updated the amount to 2022. Conversely, in a normal or declining equipment market, you may not receive the insured amount. even if you paid a premium to insure the machine at that amount – difficult conversation at the time of claim, not only for the agents, but for the insurance company. Keep it simple…group all your gear into one dollar amount and insure it on an aggregate basis so that each individual piece of gear isn’t tied to a specific dollar amount. Unfortunately, some carriers do not allow comprehensive harvesting equipment insurance. Do yourself a favor and at least insure the rest of your farm personal property with coverage for greater flexibility and to avoid future headaches.
Cereal complex – the most valuable investment for a cereal grower and must be insured as such. With steel continuing to rise, it is almost impossible to achieve this mobile correct coverage goal if the components of your grain complex are individually insured. Unless your agent has extensive experience building grain systems, there is absolutely no good reason to insure every bin, dryer, leg, cross auger, platform, walkway, conveyor and electrical box separately. Why? Because just like gear, it’s nearly impossible to properly put an exact value on every component in your grain setup. The best method is to insure the whole grain complex (everything connected) under one amount. Think of it this way, does your insurance company insure your roof, garage door, siding, and fixtures separately or does it insure the total value of the home in one amount? Why treat your cereal complex differently?
Farm Gains and Extra Expenses – nothing like seeing a combine burn out in the field and having to rent one out of pocket or having the expense of trucking grain to a commercial dryer because your dryer has caught fire. There are many scenarios that would create a loss of income or an additional expense for the farm. The key is to be aware of what can happen and from what risk you are comfortable with self-insurance.
Agricultural Employer Responsibility – I think we would all agree that farming is dangerous and the safety of your employees is always a priority, but sometimes we can do all good things and accidents always happen. Employers’ liability could be considered a close sibling of workers’ compensation and is designed to protect the employer against claims for employee injury, illness and death caused by practices or working conditions that are not not covered by workers’ compensation. In Ohio, employers are recommended to purchase employers’ liability to protect their business from the coverage gap between the state fund and their general liability insurance. Plus, it’s cheap!
Agricultural pollution and agricultural automobile pollution – as a farmer you deal with a lot of materials and chemicals that can cause a pollution incident. Most carriers have a similar pollution endorsement, but the charges can vary widely depending on the insurance company, especially when you add pollution to your farm auto insurance policy. Every operation is different and has different pollution needs, work with your agent to assess your specific situation and needs.
ATV and UTV Offsite Coverage – here’s the deal, if you have an ATV or UTV, call your agent to verify that you have offsite coverage. Everyone has heard of an accident in a recreational vehicle. Hedging is simple, easily overlooked, inexpensive, and really should be standard for farm hedging.
A farm insurance policy should not be treated as a commodity that can be bought off the shelf. Nor should it be treated as a “pre-packaged” plan with a few add-ons. Skip the “model home” route and get with a master builder and lay that foundation. Farmers work too hard to settle for anything less from their agent. And remember – just as you perform periodic maintenance on your home, it’s just as important to perform periodic reviews of your policy with your agent, so dust doesn’t build up on your insurance record. . If the goal is to keep farming for generations to come, make sure your farm is okay, lock it down, make it bulletproof.