farm insurance Archives | Agripro Insurance Brokers

Farm Crop Insurance

Farm Crop Insurance cover is vital for any cropping operation. In 2021-2022 the crop season experienced higher yields and increased market values. This resulted in insurance capacity shortages within some regional shires.

With the 2021-2022 winter crop the highest yield on record, this placed pressure on crop insurer capacity. This has highlighted the need for farms to place crop insurance cover early.

90% of broadacre crop insurance claims are due to hail and with the increase in weather volatility and input prices, these risk factors need to be considered when reviewing the need for crop insurance for your farm.

Crop insurance statistics provided by state within Australia — *https://www.awe.gov.au/abares/research-topics/agricultural-outlook/australian-crop-report/overview*

When Should You Purchase Crop Insurance

We would encourage our customers not to rely on Automatic Temporary Cover from last seasons policy. It is important to arrange a new policy early in the season for your crop insurance program. Insurance cover placed early will ensure you take advantage of competitive crop insurance rates before the insurer capacity runs out within respective shires. Once the insurer shire capacity is reached, you are likely to incur higher premium rates difficulty in placing cover.

Arranging cover early in the season will ensure a competitive rate with no premium cost due until after harvest.

We are able to provide “Pre- Harvest” and “Post-Harvest” schemes and our dedicated crop insurance specialists will provide you with a full comprehensive market review from all major crop insurers.

We can also offer ways you can reduce your rate by considering different excess amounts, fixing values or combinations of options.

What is Broadacre Crop Insurance

Broadacre Crop Insurance is designed to cover crops from emergence through to harvest, including grain in storage and during transit. The policy will provide cover for a loss of potential yield due to hail or fire. Weather Index Crop Insurance can also be utilised to cover against extreme weather events such as adverse temperature and rainfall.

What types of crops can be insured

Crop insurance cover is available for all cereal, pulse and legume crops. The most common crops insured include wheat, barley, chickpeas, canola, sorghum and sunflowers.

Pre Harvest Crop Cover

What is Pre Harvest Crop Insurance

A Pre Harvest crop insurance policy is finalised at the insurers set Final Revision Date (FRD). The sum insured and premium are calculated based on your estimate of the crop yield and your nominated insured value per tonne at this time.

Advantages of Pre Harvest Crop Insurance

A Pre Harvest policy is a good options if you want to finalise your crop cover at the Final Revision Date. The downside of a Pre Harvest policy is that the final premium is calculated on the estimated yield and may not reflect your actual harvested yield. This option could be more likely to leave you over or underinsured which will impact the final premium.

Post Harvest Crop Cover

What is Post Harvest Crop Insurance

A Post Harvest crop insurance policy is finalised after harvest based on a yield declaration and your nominated insured value per tonne.

Advantages of Post Harvest Crop Insurance

A Post Harvest policy is a good option if you are worried about the accuracy of your revised insured yield at the Final Revision Date. Crop an be impacted by a variety of perils after that time which will impact on the harvested yield. You will also be required to complete an after harvest yield declaration and pay a premium that may be better reflect the harvested yield.

Tractors farm contracting wheat with blue sky

Post Harvest vs Pre Harvest Crop Insurance

The Post-Harvest policy responds better to yield variation incurred after the Final Revision Date, automatically adjusting the sum insured and providing a more accurate claim payment.

A Post-Harvest policy can be more expensive than a Pre-Harvest policy. It also usually requires some additional paperwork, however it does provide better coverage as it more accurately reflects the season you had, not the potential season.

Crop Insurance Additional Benefits

Most crop insurers will provide additional policy benefits, however these can vary between insurers and it’s important to deal with a farm insurance broker who understands your cropping insurance requirements.

These additional benefits can include;

Chemical overspray
Livestock intrusion
Transit cover for grain/baled hay -fire, impact, collision and overturning of vehicle
Harvested crops (grain) stored in a silo or enclosed building – fire & perils
Harvested crops (grain) stored in silo bags or temporary field bins – fire only
Baled hay from harvested crops – fire only
Claim mitigation expenses (Inc. costs of replanting)
Fire-fighting expenses

Crop Insurance Proposal

Agripro Insurance Brokers have access to Australia’s largest crop insurers and industry leading expertise

To arrange cover for your Crop Insurance requirements, simply complete and return our Crop Insurance Proposal.

Agripro Crop Insurance Proposal Download

Why Use A Farm Insurance Broker

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

farm insurance brokers aerial view of fruit orchard in Australia

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.

Graph chart showing Agriculture, fisheries and forestry exports by destination — **Agriculture, fisheries and forestry exports by destination**
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 recal ls 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

Graph chart showing the number a food recalls within Australia — **Number of food recalls coordinated by FSANZ each year, shown by recall classification**
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.

Poultry farm insurance brokers. White chickens within a poultry shed

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

sheep in yards with two farmers and a dog

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.

Insurance For Dairy Farm Sheds

Insurance for dairy farm sheds can be complex to arrange, so it’s important that each dairy farm is reviewed on an individual basis. Dairy milking sheds will differ from farm to farm and your farm insurance program needs to be tailored for your own farm insurance requirements.

A dairy shed is the key working asset for any dairy farm so it is vital that any farm insurance program is covering both the building and internal plant to it’s full replacement value.

What Are The Insurance Risks Of Dairy Farm Sheds

Dairy Shed

The cost to build a dairy can now exceed $2M depending on the size of the shed and milking plant.

When considering the sum insured of a dairy, it’s important to include;

Shed structure including any internal office/staff lunchroom fit out
Yard structure
Internal plant including any electronics, cup removers, milk meters etc.
Vats and compressor units
Silos and any feed crushing plants attached to the dairy
Removal of debris

Policy Wording

It’s important for farms to review how their dairy farm shed is insured within policy. Some farm insurance companies require the dairy shed and plant to be insured separately. For example, the shed to be insured as a “building” and plant to be insured as “contents or other property”. This can cause a problem as the reinstatement method may differ and leave the building insured for full replacement and the plant insured for indemnity cover. An indemnity payment on a claim would take into consideration the age of the plant and provide payment on the depreciated value rather than the full replacement cost.

Dairy Electronic Equipment Breakdown

Breakdown cover for electronic equipment should be considered under a dairy farm insurance policy. Computer ID systems, electronic cup removers and milk meters can be a significant cost to repair in the event of breakdown.

Dairy Farm Loss of Data

A number of larger dairy farms now rely on computer ID feeding, drafting and herd health systems. It’s important to consider how the farm is storing data and ensure that there is appropriate insurance in place to cover any restoration costs in the event of a claim.

Machinery Breakdown

Vat compressors, milk pumps and washdown pumps are common areas of breakdown for dairy farms and it’s important that these items are reviewed and cover is provided within a farm insurance policy.

Dairy Farm Business Interruption

A dairy is the key income generator for a dairy farm and it is important that any dairy farm insurance policy includes business interruption cover. A dairy farm cannot simply close, as there is a continued need for cows to be milked and continuation of the farm operation.

Milk Cover

There are many risk exposures that can cause a loss of milk to a farm. It’s important that there is cover in the policy for loss of milk due to machinery breakdown, accidental damage and antibiotic contamination.

Couple milking dairy cows on rotary milking shed

Dairy Farm Insurance Claim Examples

Claim Example 1:

A contractor was engaged to undertake some welding repair activities on a rotary dairy. The welding on the dairy platform caused a power surge to the dairy cup removers. The damage and resulted in the replacement of 50 electronic cup removers at $1,500 per unit.

Total Claim Cost: $75,000

Farm Policy Section: Farm Property- Accidental Damage Cover

Claim Example 2:

A dairy farm incurred an unidentified power surge to the dairy shed which resulted in electronic breakdown to the dairy ID computer. The breakdown to the computer system also resulted in a loss of cow ID data and required re-entry and scanning of the herd into the new computer system.

Total Claim Cost: $25,000 for the ID system and computers & $5,000 for data restoration

Farm Policy Section: Electronic Equipment including restoration of data

Claim Example 3:

A farm dairy vat split and glycol leaked into the farm milk. The dairy vat had to be repaired and the farm also incurred a loss of the milk due to contamination.

Total Claim Cost $10,000 for the vat repair and $9,000 for the loss of milk

Farm Policy Section: Machinery breakdown including loss of milk

dairy cows walking to dairy shed for milking

How To Reduce The Risk of Dairy Sheds:

Standby back up power sources- fixed or tractor driven generators
Install power surge protectors to sensitive electronic equipment
Audible alarm systems for plate cooler and vat connections to prevent loss of milk
Install fire extinguishers and appropriate signage
Maintain cloud based backups of all cow record data
Implement hot works permits for any welding, cutting or grinding activities
Maintenance agreement for servicing the dairy plant
Development of a tailored Workplace Health and Safety Management System.

There are many risk considerations for dairy shed insurance. It’s important that the farm deals with an experienced farm insurance broker who has an in-depth knowledge of dairy farm operations.

Farm Business Interruption Insurance

Farm business interruption insurance cover is a vital component for any farm operation. While the importance of business interruption insurance for commercial business is well documented, it's less well recognised in the farming sector. However, it is just as important, if not more so, that farms have adequate business insurance interruption cover due to their increased external risk exposure.

Farm business interruption insurance cover is a vital component for any farm operation. While the importance of business interruption insurance for commercial business is well documented, it’s less well recognised in the farming sector. However, it is just as important, if not more so, that farms have adequate business insurance interruption cover due to their increased external risk exposure.

This article reviews the different farm insurance options that are available for agricultural operations.

Insurance To Suit Your Farm Business

Like all insurance policies, business interruption cover needs to suit your individual requirements, in particular your farm occupation.

Intensive farming operations such as poultry, eggs and piggeries require key infrastructure to ensure that the business can operate and process batches throughout the year. Most pastoral operations don’t rely on key infrastructure, and therefore, any loss of farm infrastructure may not have a significant financial impact on the business. In these cases, the business may require an alternative solution to a gross profits interruption cover.

Farm Business Interruption Insurance For Intensive Farming- Gross Profits Insurance

In terms of poultry farms, a gross profits business interruption insurance cover is vital to ensure that in the event of insured loss or damage to property, expenses can continued to be paid. Should there be a loss to a single shed or multiple sheds, it will ensure that there is minimal financial impact to the farm until property is reinstated and bird batches can continue to operate.

The calculation of insuring intensive farming operations is no different to commercial businesses in that uninsured working expenses would be deducted from the annual turnover in order to derive an insurable gross profits figure. It’s also vital that it is understood how the farm is being paid under a processor contract, as these can differ in the market.

Example – Poultry Farm (12 months indemnity period)

Calculation for gross profits value:

Annual turnover    $1,000,000
Less uninsured working expenses (e.g. gas*, power* and litter)   $170,000
Insurable gross profits         $830,000

* Always ensure that the fixed connections charges within power and gas costs are not deducted as uninsured working expenses, as these costs will still remain in the event of loss or damage to farm infrastructure.

Key Considerations for Farm Gross Profits Insurance:

Suitable for farms that are reliant on key infrastructure
Will cover the farms loss of gross profits
Uninsured expenses will differ depending on the farm occupation and farm input costs
Labour should be included within insurable gross profits to ensure employment costs are covered in the event of an insured loss
Underinsurance clauses apply (check your policy)
Consider full mortality livestock insurance extending to cover business interruption cover

Front of two green poultry shed with three silver grain silos with blue sky

Business Interruption Insurance For Pastoral Operations

Pastoral operations can be a little more complex, however they are certainly no more difficult to insure under a farm insurance policy. For example, if a pastoral operation was to lose a hay shed, it is more than likely that the farm would not incur any financial interruption to their livestock sales or production. Pastoral operations are usually more exposed to the risk of increased costs that the farm may incur in order to continue to grow and sell livestock. Therefore, a cover such as ‘Increased Cost of Working’ can be better suited to these types of operations.

See our article on livestock insurance

Birdseye view of sheep in yards being sorted for shearing

Business Interruption Insurance For Dairy Farms

Dairy farms can effectively be insured for either gross profits cover and/or ‘Increased Cost of Working’ cover. ‘Increased Cost of Working’ cover is well suited to dairy farms as they must continue to milk cows and cannot simply close their doors and receive payments for loss of gross profits. A continuation cover, such as ‘Increased Cost of Working’, is well suited to dairy farms as it covers additional costs that the farm may incur in order to continue to milk cows without disruption to animal lactation and calving patterns, which would ultimately have a long term impact on the farms production.

See our article on insurance cover for loss of milk

What Is Farm Business Interruption “Increased Cost of Working” Cover

‘Increased Cost of Working’ cover can not only be used in the event of insured loss or damage to property, but under some farm insurance policies, cover can also be provided for costs such as re-sowing of pasture in the event of grass fire. Other additional costs that may be considered under the policy for business continuation purposes may include, purchasing additional fodder to keep cattle fed while pastures are reinstated, additional labour costs that the farm incurs, and even transport or lease costs should cattle need to be agisted or milked on another property.

‘Increased Cost of Working’ is an elective sum insured and will not generally incur any underinsurance clauses. As a result, it can be difficult to calculate the most appropriate sum insured for a farm.

Considerations for calculating the sum insured should include:

Costs of re-sowing fire damaged pastures (including seed & labour)
Farm consultancy fees
Additional labour costs to feed or milk cattle
Fodder costs to feed livestock while pastures are reinstated and back in rotation
Any livestock transport or lease costs should cattle be required to be moved to an alternative farm or dairy

Feed costs can represent a large portion of the required sum insured for ‘Increased Cost of Working’ cover. This can be due to the timing of the loss and various seasonal conditions that may increase the length of time required to have pastures back in working rotation

Key Considerations of Farm Increased Cost of Working Insurance:

Elective sum insured without any underinsurance clauses
Used to cover costs the farm incurs to continue the farming business- not loss of income
Insurance cover for fire damaged pasture can be covered by some insurers
No economic limit in terms of dollars spent versus income returned
Can be a more cost effective premium than gross profits insurance

Business interruption insurance for agricultural risks can be complex to insure and will vary depending on the occupation and the individual farm activities. It is important that your insurance broker is experienced in agricultural risks and has an in-depth understanding of the farm to ensure adquite protection