Why should I use farm insurance broker?
This topic highlights the expertise and personalised service provided by farm insurance brokers, emphasizing their role in managing complex risks and offering industry-specific advice.
The trend towards larger farm sizes and corporate farming is altering the risk landscape for many agricultural operations. These larger entities are increasingly diversifying their activities, making traditional, standardized farm insurance policies inadequate.
It is crucial for these larger agricultural operations to collaborate with a farm insurance broker who specializes in agricultural risk management and can provide access to top-tier farm insurance solutions.
Should I Use Farm Insurance Brokers?
Farm insurance brokers represent your interests rather than those of the insurers. They offer guidance to help you effectively manage the risks associated with your farm and will identify and implement the most suitable insurance solutions tailored to your specific operational needs.
In contrast to an insurance broker, a direct insurer often has restricted access to a variety of products and pricing options. It is essential for larger farms to have access to a wide range of insurance products, both domestically and internationally.
What Do Farm Insurance Brokers Do?
- Review and assess potential farm risks
- Work on behalf of your farm business, not on behalf of the insurer
- Source multiple insurance products and pricing within the market
- Have a thorough understanding of the insurance market and the ability to negotiate premiums on your behalf
- Manage claims on your behalf including lodgment and negotiation with the insurer to provide the best possible outcome
- Remain up to date with policy wordings, industry changes and emerging farm insurance risks
Emerging Risks For Agriculture
Farm Liability Insurance
Farm Labour Hire
As farms have grown, so too has the use of contractors and labour hire personnel. The use of labour on farms has changed significantly over the past decade.
It is important that a farm insurance broker is utilised to ensure the most appropriate farm liability insurance is sourced for your farm business, taking into consideration the use of labour hire and contractors engaged.
Farm Export Insurance
Australia exports 70% of the total value of agriculture, fisheries, and forestry production.
Fruit and vegetable exports have increased by 69% and this sector continues to be the most reliant on labour hire, casual labour and contractors.
Many larger farms within the horticultural and beef sector are now exporting directly overseas and it is important that these risks are considered not only for liability but also for marine and trade credit insurance for farms.
Source: www.agriculture.gov.au/abares
Farm Liability Insurance Policy Coverage
There are significant differences in farm liability policy wordings including claims made vs claims occurrence and geographic restrictions. A farm insurance broker will have the ability to advise on the most appropriate liability cover for your farm.
Product Recall Insurance For Agriculture
With many larger farms now supplying retail supermarkets directly, the costs associated with product recall due to contamination and maintaining brand reputation can be significant. On average, nearly 10 product recalls occur every week within Australia, with food and beverage being the most commonly recalled products.
Product Recall Liability Insurance For Farms Can Provide Cover For:
- Accidental contamination
- Product tampering
- Product extortion
- Alleged contamination
- Government recall
- Adverse publicity
- Reworking costs
- Business interruption
Source: www.foodstandards.gov.au/industry/foodrecalls
Farm Livestock Insurance
Australia is recognised for having one of the most effective biosecurity programs globally. The severe consequences of disease outbreaks, such as African Swine Fever and Foot and Mouth Disease, have been evident in agricultural economies abroad. Australian farms are now operating at higher intensities with increased livestock numbers, which can elevate financial risks.
The rise of free-range farming, particularly in egg and poultry production, also heightens the potential for diseases to be introduced from wildlife, including migratory birds.
For many intensive and free-range farming operations, the risks extend beyond the financial loss of livestock. There is also the potential disruption to farm operations and supply chains if government-imposed quarantine measures are enacted. A recent example occurred in Victoria, where several farms were quarantined due to an outbreak of highly pathogenic H7N7 avian influenza.
At Agripro Insurance Brokers, we offer customised livestock insurance solutions for poultry farms, poultry processors, piggeries, and beef feedlots, which can include coverage for business interruption in the event of government quarantine or livestock slaughter.
Farm Management Liability Insurance
Management liability insurance is a well-established product but it is frequently neglected in the agricultural industry.
In Australia, the agriculture sector employs more than 300,000 individuals. As labor demands and corporate responsibilities rise, the risks associated with agricultural operations have escalated significantly. Over the last ten years, there have been substantial updates to occupational health and safety regulations in Australia, particularly with recent changes implemented in Victoria in July 2020.
Ongoing legislative developments are further elevating the risk landscape for agricultural enterprises, making it essential for any farming business or partnership to evaluate the necessity of farm management liability insurance.
Farm Management Liability Insurance Can Provide Cover For:
- Directors & officers liability insurance
- Statutory liability insurance for fines or penalties including
- EPA
- Occupational Health and Safety
- Employment practices liability
- Unfair dismissal
- Workplace harassment
- Failure to employ or promote
Drought Insurance for Farms
Index insurance is based on an agreed predetermined index that will pay out in the event of weather related or catastrophic events. Index insurance does not generally require the use of claims assessors so it will allow the claims process to be much quicker and more factual for farms.
Weather index insurance is already being used by many cropping farms where the predetermined index is developed prior to the commencement of the policy.
Weather Index Perils That Can Be Insured:
- Insufficient or excessive rainfall
- Extreme temperatures including
- frost
- humidity
- windspeed
- Seasonal rainfall
How Farm Weather Index Insurance Is Used:
- Insufficient rainfall that results in a reduced crop yield
- Excessive rainfall and wet harvest cover resulting in reduced yield or downgrade
- Frost that results in a reduction of yield
- Reduction in seasonal rainfall
Weather Index Insurance For Agriculture
Weather index insurance can also be considered for agricultural suppliers or processors who may be indirectly impacted by weather related events.
Examples Of Weather Index Insurance Applications:
Fertiliser Suppliers
Farms within the specified region receive below average rainfall which results in a reduced volume of fertiliser being used. The reduced volume used on farm impacts the financial income of the fertiliser business.
Meat Processors
A reduced seasonal rainfall results in lower processing numbers for a meat processing facility which financially impacts the business.
Milk and Cheese Processors
Farms that supply the dairy company received below average rainfall within the region, which reduces the milk yield and financial income of the milk processing company
Agricultural Investment
A portfolio of agricultural operations managed by an investment fund receive below average rainfall for the season which impacts the investment return for the company and shareholders.
Agripro Insurance Brokers have access to over 150 global insurance products we can provide customised agricultural insurance solutions for any large or corporate farm. Australian farms are highly diversified and our experts have global market access and knowledge to help manage your risk.