Our thanks to Rural Insurance for providing some detailed advice on farm insurance.
‘Let’s face it. A year can soon fly by and before you know it your insurance is due for renewal. Sometimes the temptation is to simply renew but it’s important that you take the time to review the changes you’ve made to your farming business, to make sure that you’re fully covered. As a first point of call, you should read through your Policy Schedule and Statement of Fact to make sure that the facts and figures still reflect your business.
Here are a few questions to think about at renewal:
- Has the nature of your business changed?
Whether you’ve stopped milking dairy cows or starting rearing Bed & Breakfast pigs, the nature of many businesses can change and therefore the risk we’re insuring has changed. It’s important that material facts are disclosed so the insurance risk can be underwritten appropriately.
- Have you purchased any livestock in the last year that need covering? Do they need to be covered under a specialist livestock insurance policy?
If you’ve purchased any pedigree animals, they’re often best covered under our specialist livestock insurance policy due to their value. This policy provides all risk cover as a result of loss, destruction, damage, death, injury, illness and disease.
- Have you bought any vehicles in the last 12 months?
It may sound obvious, but we have seen accidents and thefts for vehicles which we don’t have on cover, as Policyholder’s may have forgotten to notify us to add it to their insurance policy when it has been acquired. Not only can this leave you uninsured, but you may also be breaking the law by not having motor insurance if it is used in a public area or an area to which the public have access.
- Have any of your vehicles changed in value recently?
You may have a vintage tractor which has gone up in value or, on the other hand, a vehicle that has been damaged or is just older and therefore has decreased in value. No matter what occurs it’s necessary to keep the value of your vehicles up to date as this can impact your level of cover in the event of a claim and could impact on your premium.
- Have you converted any of your buildings?
With farmers looking for new initiatives we are seeing more and more buildings being converted into holiday cottages or wedding venues or let to mechanics or for storage. These changes can not only impact the value of the property but also the types of cover needed, which you may not have in place. For example, do you have enough public liability cover as a result of converting a barn in to a wedding venue? Have the construction, insulation or heating methods of any of the buildings changed? All of these factors could change the cost of insurance, or even the acceptability of the risk.
- Have you diversified in the last year?
Following on from the above, diversification is becoming more and more popular as farmers look to bring in a second income stream. No matter how big or small the change, it may impact your level of cover. So, even if you start selling eggs from the farm gate it’s best to inform your broker who will advise your renewal needs to include an amount of public liability cover
- Do you have cover for environmental damage?
In the event of a pollution incident your business may be liable for the damages. That’s why it’s important to consider taking out Environmental Impairment Liability insurance which covers costs relating to an incident of pollution on your farm. To find out more click here
- Are you adequately covered in the event of business interruption?
In the event that something happens to your buildings or equipment, it’s likely that your standard insurance will cover the replacement or rebuild costs however, it won’t cover the income lost as a result of the incident. That’s why it’s important to consider taking out business interruption cover.
- Have you recruited any employees or changed the nature of your workforce?
It is likely that you’ll already have employer’s liability cover in place as by law, most employers are required to insure against liability for injury or disease to their employees arising out of their employment. However, when employing someone new you’ll need to update the payroll figure on your insurance policy to make sure it’s accurate. It’s also best to carry out a new risk assessment and ensure your levels of cover are adequate should the worst happen. If you don’t have any employer’s liability cover, but you occasionally hire in labourers to carry out certain jobs on the farm or cover for you holidays, then you will need the cover for this also.
These are just a few things to consider when reviewing your farm insurance. Any changes to your business that impact your insurance policy should be updated at the point of change, this is especially important for updates to material facts. Keeping your farm insurance policy update to date gives you peace of mind that your covered should the worst happen, or if there is a refund due to you following changes this will normally only be calculated from when you tell us of the changes.’