Dairy Farm Insurance for milk is rarely reviewed or implemented in many dairy farm insurance programs. It’s important to consider how insurance relates to milk on your property, including the associated risks and the ways in which an insurance policy can provide cover for your farm.
It may seem to be a simple process to insure milk. Many farms may believe that their current farm insurance policy provides adequate cover. There are in fact multiple areas throughout a policy where milk can be insured for various events.
It is important that your insurer not only knows about the structural risks on the property, but also understands the operational risks of your dairy farm business.
See our article for dairy farm business interruption insurance
Dairy Farm Insurance For Milk- Insurance Checklist
- Milk contamination
- Deterioration of milk in cold storage
- Contamination to milk tankers or factory silos
Loss Of Farm Milk Due To Contamination
Loss of farm milk due to contamination is intended to cover the financial impact of a farm having to dispose of their milk due to contamination caused by antibiotics or chemicals. Insurers in the market provide a mixed variation of cover for contamination of milk. It should be noted that some insurers will not provide any cover at all. It would be recommended confirming f your current insurer provides cover for contamination of milk caused by antibiotics or chemicals.
Insurance For Deterioration of Milk in Dairy Vats
Deterioration of milk in cold storage is generally provided within a machinery breakdown cover. This is usually an optional extension which would provide cover for loss of milk in the event of breakdown. Cover is provided for loss of milk due to breakdown of plant, sudden or unforseen failure to the public power supply or contamination caused by accidental escape of refrigerant into the vat. Should these events occur, cover can be provided for loss of milk due to it being unsuitable for factory pick up. The limit of cover under the policy needs to be sufficient to cover the maximum value of milk in the vat at any one time- taking into account ‘skip a day pick-ups’ and seasonal pricing variations.
Dairy Farm Insurance Cover- Contamination To Milk Factory Tankers or Silos
Within a farm liability cover, some insurers will provide cover for the farm in the event of contamination to factory milk tankers or silos caused by milk contamination. This may be caused by the farms produce (milk) contaminating a factory milk tanker or silo from antibiotics or chemicals. Should a tanker pick up milk from your property and your milk contaminates the existing milk within the tanker or factory silo, this can lead to a potential liability claim, as your farm business has caused property damage to third party produce- being the factory owned milk.
Farm liability cover is not designed to provide cover for loss of earnings to the farm business. It is intended to provide cover if milk processor attempts to recover costs due to the loss of their milk/products. Not all farm insurers will provide this cover and some will have a limit on cover provided. It would be advisable to contact your insurer or farm insurance broker to confirm your level of cover.
As you can see, milk can be a complex risk to insure. However, with the correct insurance advice and adequate policy coverage, you can rest assured that you won’t be left crying over spilt milk.