The benefits of insurance for farmers

Farming is an important industry in the UK, vital to our food security and a major source of employment. It’s also a very diverse sector, and every farm is different. From traditional arable, livestock, or mixed farms to vineyards and market gardens, each type of farming comes with its own challenges, rewards, and risks.

Fortunately, the right farm insurance can provide a safety net to help mitigate these risks and ensure the continuity of your business. In this article, we explore the many benefits of farm insurance, its importance to the agricultural sector, and the types of cover you may need.

• What are the benefits of farm insurance?
• What insurance does a farm really need?
• What add-on farm insurance options are available?
• What are the disadvantages of agricultural insurance?

What are the benefits of farm insurance?

As with all insurance, the main benefit is that you’re covered if something goes wrong. This gives you peace of mind and reduces the financial risk to your business.

Farms can be complex workplaces with many buildings and lots of machinery. They can be exposed to many risks, from industrial injuries, livestock diseases, hail-damaged crops, and equipment theft. Here are some of the main benefits of farm insurance:

• Peace of mind – Farm insurance gives farmers the peace of mind to focus on their business without worrying about potential risks and financial loss.
• Business continuity – By providing the funds to recover from a loss, farm insurance ensures that your farm can remain operational.
• Access to risk management resources – Farm insurance brokers are specialists in their field. They can provide risk management advice and resources to help improve the safety on your farm and reduce the risk of making a claim.
• Tailored cover – Policies can be tailored to cover the risks specific to your farm, ensuring you have the cover you need, without paying for policies you won’t use.
• Legal compliance – If you have employees, employers’ liability insurance is a legal requirement, a key cover that can be included in a farm insurance package.

What insurance does a farm really need?

Every farm is different, and the insurance you take out will reflect that.

Some of the most common farm insurance covers include:

• Farm property. This protects things like farm buildings and their contents, machinery, arable inputs, and other assets from insured perils including fire, theft and vandalism.
• Vehicle insurance. This can range from tractor insurance to cover for your entire fleet, including quad bikes and GPS equipment.
• Engineering breakdown and inspection. Protection against accidental damage or machinery breakdown.
• Goods in transit cover. To protect produce and other goods when they’re on the move.
• Public liability insurance. To cover against claims of injury or damage to property by members of the public.
• Employers’ liability insurance. This protects you against claims made by employees, such as in the event of an injury.
• Environmental impairment liability insurance. To protect against the cost of a pollution incident, including clean-up costs, third-party damage, and legal costs.

While combining these covers is a key benefit of farm insurance, many farmers choose to extend their policies further to protect themselves against a range of other risks.

What add-on farm insurance options are available?

When you take out agricultural insurance, a good broker will take the time to get to know your business in detail. This allows them to recommend any additional cover you may need and talk you through its benefits. Additional cover you may need includes:

• Hail damage insurance. Vital for arable farms in an increasingly unpredictable climate.
• Livestock insurance. This protects you against the loss, injury, or accidental death of animals. It can also cover some infectious diseases.
• Business interruption insurance. In case of an insured event that stops your business from operating as normal.
• Farm credit insurance. This compensates you if customers become insolvent or default on payment.
• Renewable energy insurance. This can cover risks associated with renewable energy plant, such as anaerobic digesters and biomass plant.
• Directors’ and officers’ liability insurance. This covers the cost of compensation claims made against business directors or key managers, who can face unlimited personal liability for alleged wrongful acts.
• Key person insurance. Protection against any losses that result from the serious illness or death of a key person in your business.
• Special events insurance. Cover for corporate and social events, including weddings, hosted on your farm.
• Estates insurance. This protects properties such as mansions and their contents if they are open to the public.

What are the disadvantages of agricultural insurance?

The benefits of insurance to UK farmers are considerable. That said, there can be some disadvantages to agricultural insurance too. These include:

• Cost. The more complex your operations, the more intricate the cover you’ll need. This can push costs up. However, brokers have access to different insurers to help you find competitive policies and can provide advice on setting your excess and other suggestions that may lower your premium.
• Limited cover. Some insurance policies may have exclusions or limitations, leaving you exposed to certain risks. Getting expert advice from a broker before taking out cover can ensure you are covered for the risks your farm is exposed to.
• Overreliance on insurance. This can sometimes lead farmers to become less proactive in managing risk. While insurance provides a safety net, farmers must still meet the legal requirements of running a farm and insurance should not replace effective risk management practices.

As you’ve seen, there are major benefits to taking out agricultural insurance. By using a broker with experience of the farming sector, you’ll get expert help with tailoring cover to your business operations.

While farm insurance is an additional cost for your business, it’s a necessary one. Farming accidents are sadly too common, and farms are often targets for thieves. Livestock get ill, and crops get damaged by hail. Rather than risk situations like these, it makes sense to benefit from well-planned – and regularly reviewed – farm insurance from a specialist broker.

If you’d like to talk to an expert about your farm insurance, get in touch with our team today on 01603 218000.