Frequently Asked Questions About Small Business Insurance
Agribusiness Insurance FAQ. 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 workers compensation protection for worker injuries.
Auto insurance should be written if the operation owns vehicles and especially if it transports its own products.
We wanted to provide a deeper dive into small business insurance to help our readers get a better understand of the commercial insurance policies they want and need with the Agribusiness Insurance FAQ.
Read the Agribusiness Insurance FAQ to learn what type of commercial insurance coverages are right for your agribusiness - including liability, property, workers compensation and other specialty policies.
According to Webster's Dictionary, an agribusiness is, "an industry engaged in the producing operations of a farm, the manufacture and distribution of farm equipment and supplies, and the processing, storage, and distribution of farm commodities."
Agribusiness include - but are not limited to - the following types of businesses:
You can reference the Insurance Definitions, Dictionary And Glossary to better understand the commercial insurance policy terms and language used in our Small Business Insurance FAQs.
Following are some suggested commercial policies and coverages applicable for agribusinesses:
Agribusiness operations are not eligible for most businessowners programs, but commercial coverages can be conveniently combined under a commercial package policy.
Larger agribusiness risks should consider writing their insurance coverage under an agricultural output policy due to its flexibility and additional coverages.
Equipment Breakdown Protection can be provided through an agricultural output policy or may be written separately. The coverage is extremely important because of the extensive use of machinery to control temperatures, monitor feed, milking and many more operations.
Utility services direct damage coverage is an important optional coverage that should be considered because the agribusiness risk depends on an uninterrupted source of power for its continuing operations.
Types Of Property Coverages:
Animal mortality, transportation and electronic data processing are three vital inland marine coverage needs. Livestock operations have significant exposures to all three because of the potential for significant loss when animals are kept in a single building. Transporting live animals can be very hazardous especially on narrow rural roads.
Electronic Data Processing coverage is also extremely important because all agribusiness operations are becoming dependent on it for communication and also for efficiently managing all aspects of the processing.
Types Of Inland Marine Coverages:
Loss of crops or livestock can financially ruin an agribusiness operation. Therefore, special coverages are available specifically to cover these unusual loss exposures. The market is limited because of the unique nature of the exposures, and the specialized knowledge necessary to underwrite and price the risk and to adjust any claims.
Crop hail, multiple peril crop insurance and revenue insurance are all government plans sold and serviced through local agents and contracted insurance carriers.
Types Of Crop And Livestock Coverages:
Agribusiness operations having contracts to supply products to government entities are required to provide a contract-performance of service or supply bond. Other bonds may be required, depending on the actual operations performed or services provided.
Types Of Surety Coverages:
Tainted products are the biggest general liability concern for most agribusiness, but with the surge of agritourism, premises injury concerns are increasing. Some large operations have a railroad spur on their premises, which adds an exposure that can only be covered with a railroad protective policy.
Types Of Liability Coverages:
The agribusiness automobile exposure varies dramatically based on the particular type of operation. Those with livestock will have considerable more exposure than those that are grain. It is important to evaluate the drivers for experience and training in the particular transport because transporting live animals can be extremely difficult especially on rural narrow and winding roads.
Types Of Business Auto Coverages:
Most employers are required by state statute to provide coverage through a workers compensation policy for on-the-job injuries sustained by their employees. However, some agricultural workers are exempt from coverage. It is important to add a voluntary compensation coverage endorsement to cover those workers in order to avoid a coverage gap. Farm workers have some of the highest rates of work-related injury, so coverage should be as broad as possible.
Types Of Workers Comp Coverages:
Tainted food products can injure great numbers of people throughout a city, state, region or nation. Because the dollar impact of the damages can be catastrophic, additional excess or umbrella limits of insurance are needed. If coverage is written on a claims-made underlying policy, retroactive excess liability coverage should be considered.
Types Of Excess Liability Coverages:
Ocean marine cargo coverage should be considered for goods shipped overseas. Because the policy has war risk exclusions for certain geographical areas, the status of countries purchasing the goods should be reviewed and war risk coverage, as needed.
Types Of Ocean Marine Coverages:
Loss exposures to agribusiness operations are different, depending on the types of operations conducted, the nature of the customers, and the countries where the products are sold. The coverages provided by the following policies may be particularly helpful to certain customers.
Environmental impairment and pollution-related items are of particular concern with the increased emphasis of waste disposal and ground water contamination. Unmanned aerial vehicles (drones) are becoming a valuable tool for many agricultural risks. The uses continue to grow as the drones become more sophisticated and more accessories become available.
Types Of Specialty Coverages:
There are many commercial insurance policies available for Agribusiness. To find out what types of coverage your business needs, speak to a professional insurance broker with experience in insuring Agribusinesses.
Learn about the coverages available for specific industires with the Insurance FAQs below: