Dairy Farm Insurance Hawaii Policy Information
Dairy Farm Insurance Hawaii. Whether you operate mid-sized dairy farm that produces milk and other dairy-related products for your local HI town, or you own a massive amount of cattle that produces milk-based products that are shipped throughout the country, you're going to need to make sure that you have the right type of protection. Being a dairy farmer is extremely rewarding; however, several liabilities are associated with this line of work.
Of course, making sure that you and your staff stay abreast of the latest safety standards and protocols and making sure that you upkeep your equipment are vital ways to ensure safety. But what happens if the unexpected occurs? A piece of equipment malfunctions, a third-party is injured, or someone alleges that your herd is being treated cruelly? With the right type of insurance coverage, you can protect yourself, your staff, your herd, third-parties, and your entire business from serious repercussions.
HI dairy farmers produce milk and milk products such as butter, buttermilk, cheese, and yogurt, from cows or goats. Milking is done two to three times each day, with some modern dairies performing milking on a 24-hour basis. After sanitizing the animal, a device is attached to the udder to pump milk into a holding tank. There, the milk is refrigerated until processed by the dairy or transported to an aggregator for combining with other milk before being processed.
Since milk naturally contains bacteria that will cause it to spoil quickly even if refrigerated, it is put through a heating process called pasteurization to destroy the bacteria. If the dairy sells the milk directly to retailers, homogenization also occurs to keep the cream from rising to the top. Additional processes are used to manufacture other milk products.
Many operations raise their own grain to turn into feed for their livestock. To keep milk production high, dairy animals must be bred regularly, which also maintains a steady supply of replacements for milking. Dairies are subject to regulation by the USDA, FDA, and EPA.
Why is insurance so important for dairy farmers? What type of dairy farm insurance Hawaii coverage should you invest in? Below, we'll answer these questions any more so that you can make the best decisions for your specific needs.
Dairy farm insurance Hawaii protects your cows producing raw milk for bulk sale, hay, pollution liability and more - with rates as low as $77/mo. Get a fast quote and protect your income now.
Why Do Dairy Farmers Need Insurance?
Imagine, if you will, any of the following scenarios:
- A fire breaks out on your farm and your herd and barns are damaged.
- A massive storm rolls through and several trees topple over, seriously damaging your farm.
- A member of your herd breaks through the fencing on your farm and ends up roaming the roadway and causes an accident.
- A vendor is dropping off supplies on your farm and slips on a puddle.
- Someone files a lawsuit against you, alleging that the products you produce caused a serious case of food poisoning.
- Someone vandalizes your property and steals a few pieces of expensive equipment.
All of these situations can result in serious financial losses that may be responsible for. If you don't have the right type of dairy farm insurance Hawaii coverage, you could end up having to cover the costs that are associated with any of these travesties out of your own pocket. Unless you have hundreds of thousands of dollars socked away - and even if you do have a substantial amount of money saved - trying to cover these types of expenses on your own could put you in financial ruin. There's a serious chance that you could go bankrupt; and even worse, it's possible that you could lose your entire business.
In order to off-set the financial devastation that can arise in any of the aforementioned situations - or any other incident that could impact your business - having the right type of insurance coverage is an absolute must. Instead of having to pay for lost, stolen, or damaged equipment and property, or having to cover the cost of lawsuits and medical bills (and the myriad of other costs that you could be responsible for), your insurance coverage would assist you with the financial burden. In other words, insurance can help to protect you from serious financial trouble. Ultimately, it could save your business.
What Type Of Insurance Coverage Should Dairy Farmers Carry?
There are several types of insurance policies dairy farmers should consider carrying. In some cases, these coverages are required by law; however, it's also a wise idea to invest in policies that aren't compulsory. What type of insurance should you purchase? Here's a look at some policies that are absolutely essential for HI dairy farmers:
- Commercial liability coverage
- Commercial property insurance
- Commercial vehicle liability coverage
- Livestock insurance coverage
- Pollution liability coverage
- Product liability insurance
- Workers' compensation insurance
These are just some of the types of dairy farm insurance Hawaii policies that can benefit dairy farmers. The amount of insurance coverage that you need for each policy will depend on a variety of factors, such as the size of your herd and farm, the type of equipment you own, and how many people you employ, just to name a few. The cost of coverage for each type of policy will also vary depending on the unique needs of your farm.
HI Dairy Farmer's Risks & Exposures
Premises liability exposures is moderate. FDA inspectors and veterinarians regularly visit the premises. Dairy farms are often visited by school-age children and other tour groups who can trip and fall on uneven walking surfaces or housekeeping hazards. Visitors should be accompanied by an employee. Restricted areas should be secured to keep visitors from straying into operational areas. Fences should be well maintained to prevent animals from straying, especially onto roads.
Retail operations should have excellent housekeeping to prevent slips and falls. All exits should be adequately marked. The dairy may present an attractive nuisance to trespassers. There must be adequate security to prevent unauthorized entry.
Products liability exposures are moderate due to the potential for contamination, spoilage, and foreign objects in the milk. Raw milk should be tested before delivery to milk processors. Effective procedures are required to ensure sanitary working and processing conditions. The workplace must meet all FDA specifications and be arranged so that foreign substances do not enter processing areas. A testing laboratory should be on-site to perform quality control.
Tanker cleaning must be done on a continuous basis and fully documented. Controls must be in place to prevent contamination from exposure to chemicals such as insecticides and pesticides. Stock dating and rotation are crucial factors. An effective working recall program that can be activated immediately must be established.
Environmental impairment liability exposures are moderate due to the potential for air, land, or water pollution from the application of chemicals and pesticides, disposal of animal waste and the existence of motor vehicle fuel storage tanks. Larger operations or those raising animals in confined settings may have on-site manure lagoons that produce toxins including ammonia, carbon dioxide, hydrogen sulfide, and methane that are hazardous to humans and animals.
Drugs, needles, and syringes used to administer medications or to artificially inseminate animals are considered biohazardous waste and must be disposed of properly. Shipments of manure may result in off-premises pollution in the event of an accident or spill. If there are underground storage tanks, a UST policy will be required.
Workers compensation exposures are high due to the use of equipment and interaction with unpredictable dairy animals that can bite, kick, suffocate, or trample an employee. Training, supervision, and communication is important in maintaining a safe work environment. Slips, trips, falls, burns from heating equipment, back injuries from lifting, foreign objects in the eye, hearing impairment from noise, and muscle strains are common.
Exposure to farm chemicals, noxious odors from animal waste, and organic dust can lead to respiratory issues. Workers can suffocate in confined spaces such as grain bins, tanks, silos, and pits. Adequate safety equipment should be required for employees in grain bins and animal handling areas. Anhydrous ammonia refrigerants are poisonous when leaked into confined spaces such as coolers. Controls must be in place to maintain, check, and prevent such injury. Injuries can result from loading and unloading animals from vehicles. Employees can pick up diseases from working with animals.
Property exposures are high because of numerous ignition sources, such as heaters, cooling equipment, electrical fixtures and milking equipment combined with combustible materials such as hay, straw, animal feed and bedding, oils, and motor vehicle fuels. All machinery and equipment must be inspected and maintained regularly to avoid wear and tear or overheating losses. Wiring must be up to date and of sufficient capacity. All machinery should be grounded to prevent static buildup and discharge.
Electrical fixtures should be dust and moisture proof. Due to its combustibility, an ammonia detection system should be in place if ammonia is used as a refrigerant. Dairy products must meet extremely high sterility requirements, with most processes taking place in closed containers to prevent contamination. This sterile environment helps control most fire exposures. However, if a small fire does begin, a total loss could occur as state, local, or federal regulations may require the disposal of major portions of stock and raw materials that have been exposed to fire, smoke, heat, or water.
Spoilage losses can be severe if the refrigeration and cooling equipment malfunctions or loses power. Controls, such as alarms, must be in place to warn if power is out or if temperature rises in coolers and freezers. Emergency backup systems, such as emergency generators, should provide power if an outage or shutdown occurs. Lightning may strike buildings unprotected by rods and Ground Fault Interrupter (GFIs), and severe winds and tornados may destroy property in certain geographical areas. Dairy farms are in rural areas where fire response time may be slow and a water supply to douse a fire may be undependable.
Auxiliary fire-fighting procedures should be in place, including evacuation of the animals. Fire extinguishers should be well distributed. Automatic fire detection and suppression systems should be considered, especially in larger operations. Smoking should be prohibited. Business income and extra expense may be high after a loss due to the unavailability of backup facilities.
Equipment breakdown exposure is high due to the automated milking and processing equipment which can malfunction or break down.
Crime exposures are from employee dishonesty and theft but are relatively minor if there are no retail or delivery operations. Pre-employment checks should be conducted for employees. Inventory controls should be in place. Money-handling responsibilities should be separated, with no employee handling both receivables and disbursements. A money and securities exposure exists if there are retail operations on premises or if products are delivered to customers. While milking equipment is not attractive to thieves, some prescription medications for animals may be targeted.
Inland marine exposures include accounts receivable if the dairy bills customers, computers (which may include controls for automated milking equipment), livestock, mobile equipment, and valuable papers and records. Mobile equipment is common for cleaning barns and moving the animals. A wide range of farm machinery may be needed if the operation grows its own feed grain. Valuable papers and records include pedigree information, records needed to substantiate FDA Grade A requirements, product information that may be needed in case of a recall, and veterinary records.
High-value animals may be candidates for animal mortality insurance. Goods in transit coverage will be needed if bulk milk or finished products are transported. Bulk milk must be transported in tankers used only for milk. Each must be sanitized after each use. Bulk milk tankers are bulky, and overturns usually result in a total loss. Refrigerated trucks used to transport dairy products can malfunction, resulting in spoilage.
Business automobile exposures may be limited to hired and non-owned if milk processors transport the milk. If the dairy delivers its own product or transports animals, the exposure increases. Drivers must have appropriate licenses and acceptable MVRs. Liquids may sway while being transported which will affect handling of the vehicle. Drivers must be trained in handling the sway of cattle trailers. All vehicles must be well maintained with records kept.
Dairy Farm Insurance Hawaii Coverage
To find out what type of insurance coverage you should invest in, how much coverage you should carry, and how much your coverage will cost, speak to a reputable insurance broker. You might also be able to find umbrella policies that will lump several types of coverage together.
For the safety of yourself, your employees, and your livelihood, having the right HI Dairy Farmer insurance coverage is absolutely essential.
Hawaii Economic Data, Regulations And Limits On Commercial Insurance
Location is one of the most vital factors that prospective business owners need to take into consideration when they are thinking about establishing an operation. You can have the best possible products and offer the most exceptional services, but if the location doesn't offer a market that can benefit from those goods and services, your business will have difficulty thriving.
As such, if you are an entrepreneur who has set your sights on Hawaii for the headquarters of your business or a new division of an already existing corporation, it's a good idea to familiarize yourself with the state's economic data. It's also important to understand what type of commercial insurance you will need to invest in to protect yourself, your employees, your vendors, and the clients you serve.
Below, we provide a brief overview of important economic data and the commercial insurance requirements for business owners in the Aloha State.
Economic Trends For Business Owners In Hawaii
A state's unemployment rate is a good indicator of the overall economy of the region. It indicates that there are enough jobs available to support the economy, which is a direct reflection of the success of businesses in the state. As of 2019, the Bureau of Labor Statistics indicated that the unemployment rate in Hawaii was 2.6%, 0.8% lower than the national average of 3.4% from the same timeframe. This rate has also decreased throughout 2019, as it was 2.8% in July of 2019.
As with most states, the best locations to start a business in the state of Hawaii include urban areas and the suburban regions that surround them. The top cities for business owners in HI include:
- Pearl City
While several industries do well in Hawaii, certain sectors thrive. Tourism has long been the leading industry in the state, as people from around the globe flock to Hawaii each year.
Agriculture is also a booming industry here; the state is the second largest producer of sugar can in the U.S. Defense is also a key sector here, as all branches off the armed forces have bases located in the state. Another industry that also thrives here is manufacturing; specifically the manufacturing of cotton-based goods, such as clothing.
Commercial Insurance Requirements In Hawaii
The Hawaii Department of Commerce and Consumer Affairs regulates insurance in HI. Hawaii mandates very few forms of insurance coverage by law. They enforce worker's compensation.
Hawaii requires you to have worker's compensation insurance if you hire even one employee on a regular basis. This includes part-time employees, family members, minors, and immigrant employees. It is not required for independent contractors or domestic employees, though you should check to make sure any contractors you have are true contractors, and not employees.
Hawaii also requires all business-owned vehicles to be covered by commercial auto insurance. Other types of business insurance that business owners should carry depend on the specific industry.
Additional Resources For Agribusiness Insurance
Learn about small business agribusiness insurance - a type of commercial insurance protects farmers against loss of, or damage to crops or livestock.
- Insurance Farming Terms Glossary
- Aquaculture Fish Farm
- Commercial Fishermen
- Dairy Farm
- Equine & Horse Farm
- Farm And Ranch
- Farm Equipment Dealers
- Farm Labor Contractors
- Livestock & Cattle
- Mushroom Farms
- Nursery And Greenhouse
- Nut Farm
- Orchards & Groves
- Poultry Farm
- Sheep & Goat Farm
- Swine, Hog & Pig Farm
- Tobacco Farm
- What Are Farm And Ranch Insurance Endorsements?
Farming is, and has always been a tough business. There are many uncontrollable factors for farmers to deal with - like the weather, vermin, or other natural catastrophes. Any of these can destroy cash crops, such as corn, cotton, soybeans, and wheat, and put the farmer in a very bad financial situation.
Insurance for agribusiness falls into three general categories:
The first is property insurance on the buildings and the usually substantial amount of business personal property made up of machinery, livestock, equipment and other stock.
The second is liability for both premises and products.
The last is protection for worker injuries. Commercial auto insurance should be written if the operation owns vehicles and especially if it transports its own products.
There are a wide variety of agribusiness insurance options that are available to farmers. These policies allow them to to receive compensation in the event of a poor growing season, dropping prices, cattle disease or catastrophic natural event.
Loss of crops or livestock can financially ruin an agribusiness operation. The crop insurance agrees to indemnify the farmer, rancher or grower against losses which occur during the crop year. Losses have to be caused by things which are unavoidable or beyond the farmer's control - like a drought, freeze and/or disease.
Some policies offer coverage due to adverse weather events such as the inability to plant due to excess moisture or losses due to the quality of the crop.
Minimum recommended small business insurance coverage: Buildings, Business Personal Property, Crop Insurance, Employee Dishonesty, Accounts Receivable, Computers, Goods in Transit, Mobile Equipment, Valuable Papers and Records, General Liability, Environmental Impairment, Umbrella, Business Automobile Liability and Physical Damage, Hired and Non-owned Auto & Workers Compensation.
Other commercial insurance policies to consider: Business Income and Extra Expense, Earthquake, Equipment Breakdown, Farm Owners, Flood, Computer Fraud, Employee Dishonesty, Forgery, Money and Securities, Cyber Liability, Employee Benefits, Employment-related Practices Liability, Product Recall, Underground Storage Tank, Stop Gap Liability and Unmanned Aerial Vehicles (UAV) (Drones).
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