Farm Equipment Dealers Insurance Policy Information
Farm Equipment Dealers Insurance. Farm equipment dealers, as the name suggest, are organizations that provide farmers with equipment. Tractors, plows, combines, harvesters, seeders, balers, fertilizer spreaders, sprinklers; it takes a lot of equipment to operate a farm.
As a farm equipment dealer, you have the all-important task of outfitting farmers with the equipment that they need to maintain their farms. Without your services, farmers wouldn't be able to operate a functional operation, and in turn, the community at large would suffer.
Farm equipment dealers sell new and/or used farm machinery and equipment such as tractors, combines, or irrigation systems and generally provide financing and insurance for purchasers. They may also sell outdoor power equipment for lawns, gardens, and golf courses.
They may sell farm machinery parts and accessories, provide repair and/or body work, or offer equipment rental and leasing. Some offer off-site repair services to farmers or towing services for items that must be transported back to the shop. The business may or may not be a franchise.
Most dealerships purchase new machinery directly from manufacturers, financing the purchase through arrangements with either the manufacturer or a bank. Used items are generally trade-ins from customers purchasing newer machinery, or are from farm equipment auctions.
While a selection of items may be displayed in a showroom, most are stored in open lots outside the building.
Just like any business, there are certain risks that are associated with owning and operating a farm equipment dealer organization. In order to protect yourself, your company, the people who work for you, and the people you serve, having the right type of farm equipment dealers insurance coverage is paramount.
Why is insurance for farm equipment dealers so important? What type of coverage will you need? Read on to find the answers to these questions and more.
Farm equipment dealers insurance protects your dealership from lawsuits with rates as low as $67/mo. Get a fast quote and your certificate of insurance now.
Below are some answers to commonly asked accounting insurance questions:
- What Is Farm Equipment Dealers Insurance?
- How Much Does Farm Equipment Dealers Insurance Cost?
- Why Do Farm Equipment Dealers Need Insurance?
- What Type Of Insurance Do Farm Equipment Dealerships Need?
- What Does Farm Equipment Dealers Insurance Cover & Pay For?
What Is Farm Equipment Dealers Insurance?
Farm Equipment Dealers Insurance is a type of insurance coverage that is specifically designed for dealerships that sell and repair farm equipment. It provides protection for the dealership against various risks such as property damage, liability claims, theft, and loss of income.
The coverage may include protection for physical property, inventory, and equipment, as well as liability protection for injury to customers, employees, and vendors. This insurance helps to ensure that the dealership can continue operating even if an unexpected event occurs, protecting the dealership's assets and financial stability.
How Much Does Farm Equipment Dealers Insurance Cost?
The average price of a standard $1,000,000/$2,000,000 General Liability Insurance policy for small farm equipment dealerships ranges from $67 to $89 per month based on location, services offered, revenue, claims history and more.
Why Do Farm Equipment Dealers Need Insurance?
Any number of things can go wrong with your farm equipment dealership. An employee could suffer a work-related injury. A vendor or another third-party could suffer an injury on your property. A client could claim that the equipment you supplied was defective.
The facility you operate your business out of could be damaged in a storm. Equipment that you carry could be stolen or vandalized. These are just a handful of examples of the situations that could arise, and as the owner and operator of your organization, you are legally liable for any mishaps that may occur.
In the event that something does go wrong, you could be looking at pretty steep expenses. Lawsuits, medical bills, covering lost wages, repairing damages, etc. can have exorbitant price tags. That's why you need to have the proper insurance coverage.
In the event that a mishap does occur, instead of having to pay the related expenses yourself, your insurance carrier will cover them for you. In other words, by being properly insured, you can avoid serious financial losses. Additionally, in order to legally operate a farm equipment dealer business, you are required to carry certain types of farm equipment dealers insurance coverage.
If you aren't properly insured, you could end up being hit with stiff penalties. There's even a chance that you could lose your business.
What Type Of Insurance Do Farm Equipment Dealerships Need?
There are several types of farm equipment dealers insurance coverage that farm equipment dealers may need to carry. The specific type of coverage you'll need is dependent on several factors; where your operation is located, the size of your business, the specific type of equipment you deal, and the clients you service, for example.
Because insurance coverage requirements do vary, speaking with a reputable and experienced insurance agent is vital, as they will be able to let you know exactly what kind of insurance you'll need.
With that said, however, here's a look at some of the different types of farm equipment dealers insurance coverage that you'll likely need to carry:
- General Liability - This policy covers third-party liability claims that are related to property damage and personal injuries. For instance, if a vendor were to slip and fall while making a delivery to your facility, suffer an injury, and then file a lawsuit against you, this type of coverage would help to pay for any related expenses.
- Workers Compensation - To protect your employees from any work-related injuries or illnesses they may suffer, you'll need to carry workers' comp. This policy will cover any medical care that your employees may need, as well as wages they may lose, in the event that they are injured on the job.
- Cyber Liability - You likely use technology and computer programs to place and process orders. That means that you collect a lot of personal information about your employees and your business. If a data breach were to occur, cyber liability insurance would cover any related expenses.
These policies are just a few examples of the type of farm equipment dealers insurance you'll need to carry as the owner and operator of an farm equipment dealership.
Farm Equipment Dealership's Risks & Exposures
Premises liability exposure is high due to the number of visitors. To prevent slips and falls, flooring must be in good condition, with no frayed or worn spots on carpet, and no cracks or holes in flooring. Steps and uneven floor surfaces should be prominently marked. Sufficient exits must be provided and be well marked with backup lighting systems in case of power failure.
Large equipment is stored in the yard to be viewed by customers. The yard, parking lots and sidewalks need to be in good repair with snow and ice removed, and generally level and free of exposure to slips and falls. If the premises is open after dark, there should be adequate lighting and appropriate security for the area.
There should be a disaster plan in place for unexpected emergencies. The yard creates an attractive nuisance. Equipment should be disabled when it is unattended. Chains and fences should be in place to prevent entrance to the dealership after hours.
Personal injury exposure includes allegations of discrimination, false arrest or detention, unauthorized or intrusive searches, or wrongful ejection from the premises.
Product liability exposure is high due to the potential for bodily injury, including rollovers, cuts, and amputations. Adequate guards and warnings are important. There should be a check-off procedure in place prior to the release of the equipment to the customer to prevent any vital functions not working properly.
Any direct import of products may result in the dealer being considered as the manufacturer. Nonfranchise dealers and sellers of used machinery have a much higher products exposure. If equipment is rented to customers, each should be inspected and reconditioned before being rented again.
Environmental impairment exposures can be significant due to the storage of fuel in underground fuel tanks and the disposal of used oils, solvents and other hazardous wastes from service and repair operations. All tanks and pipes, underground or above, should meet state or federal regulations and be routinely tested for leakage.
Spillage and leaking of pollutants into the air, ground, or water can result in high cleanup costs and fines. Contracts should be in place to dispose of all environmentally dangerous chemicals. If there are underground storage tanks, a UST policy will be needed.
Workers compensation exposure is high due to the potential for bodily injury, including rollovers, cuts, and amputations from the machinery and equipment. Adequate guards and warnings are important. The potential for injury increases significantly for repair operations, whether on the premises or at the customer's premises. Employees performing maintenance or repair work on customers' equipment should be properly trained.
All employees should have ear and eye protection. The proper use of lifting techniques and of dollies should be encouraged. Employees can incur injuries from slips, falls, back sprains, strains and hernias, hearing impairment from noise, and foreign objects in the eye. Welders may suffer burns. Repair areas should be properly ventilated. Refueling should be done only in well-ventilated areas to minimize inhaling of fumes.
Information regarding chemicals should be available to employees along with early warning signs of problems. Off-premises operations, including pickup and delivery of customers' equipment, can result in injury due to vehicular accidents.
Property exposure is high due to flammable fuels, paints, lubricants, oils, degreasers, and solvents used in the repair operations. These must be properly labeled, separated, and stored away from combustibles. Spray painting should be in spray booths with good ventilation, UL-approved wiring and fixtures, and adequate controls.
Welding is often a part of the repair and body work operation that needs to be evaluated for proper handling of the tanks and gases. It should be done away from the other operations with either a separate room or flash/welding curtains.
Smoking should be prohibited. Poor housekeeping is a serious fire hazard. Unless stored and disposed of properly, oily rags can spontaneously combust and cause a fire. Work areas must be cleaned regularly and trash removed from the building.
Farm machinery and equipment parts are target items for thieves. Appropriate security controls must be taken including physical barriers such as chains, fences, or gates, lighting to deter access to the premises after hours, and an alarm system that reports directly to a central station or the police department.
Business income and extra expense exposures are high as replacement facilities may not be readily available.
Inland marine exposures are from accounts receivable if the dealership offers credit, bailees if customers' items are brought in for repair, computers used to monitor inventory, exhibitions if machinery is taken to trade shows or fairs, floor plan coverage for machinery furnished by manufacturers and held for sale, goods in transit, installation floater, signs, tool floater for repair items taken off-site, and valuable papers and records for manufacturers, vendors', and customers' information.
Backup copies of all records, including computer records, should be made and stored off premises. Machinery and equipment stored in open lots are particularly susceptible to damage by hail, wind, flood, vandalism, and theft.
Lots should be well lighted with chains, fences, or gates to prevent access and transport. An alarm system that reports directly to a central station of the police department should be used. Security guards may be appropriate in some areas.
If the dealership rents machinery or equipment, the rental contract should include a hold-harmless agreement in which renters agree to assume responsibility for the operation of the machinery to limit the dealer's exposure to vicarious liability only.
The customer should also be required to sign a pre-inspection form to minimize disputes when the rented machinery is returned with damages.
Crime exposures are from employee dishonesty, forgery or alteration, theft of money and securities, computer fraud, money orders, and counterfeit paper currency. Background checks, including criminal history, should be performed on all employees handling money.
Dealers' operations involve a number of transactions and accounts that can be manipulated. There must be a separation of duties between persons handling deposits, billing, ordering, disbursements, and reconciling bank statements.
Physical audits should be conducted at least annually. Theft of money and securities prevention requires controls of monies kept in the cash drawers and regular bank drops.
Commercial auto exposures are high due to the transportation of heavy farm machinery for delivery or repairs or to other dealerships. All drivers must be trained in appropriately securing and carrying this type of equipment for transport. Drivers should have a commercial license and have their MVRs regularly checked. All vehicles must be regularly maintained with records retained.
What Does Farm Equipment Dealers Insurance Cover & Pay For?
Following are some reasons farm equipment dealers are sued and what insurance can cover for them:
1. Product Liability: Farm equipment dealers can be sued if the equipment they sell causes harm or injury due to defects or malfunctions. For instance, if a tractor sold by a dealer malfunctions and causes an accident, the dealer could be held liable.
Insurance Protection: Product Liability Insurance can protect farm equipment dealers in such cases. This insurance can help cover the legal costs associated with defending the lawsuit, as well as any damages awarded to the plaintiff if the dealer is found to be liable. It also covers the cost of recall or replacement of the defective product.
2. Personal Injury Claims: Customers or employees could sustain injuries on the dealer's premises. For example, a customer might trip over a piece of equipment and sustain injuries, leading to a lawsuit.
Insurance Protection: General Liability Insurance can help protect dealers against personal injury claims. It typically covers legal costs, medical payments, and any damages the dealer may have to pay if found liable.
3. Workers' Compensation Claims: If an employee gets injured while on the job, such as by heavy machinery, they could file a workers' compensation claim.
Insurance Protection: Workers' Compensation Insurance is required in most states and covers medical bills, rehabilitation costs, and a portion of lost wages for employees injured on the job. It also provides liability coverage for the employer if the employee decides to sue for conditions not covered under the workers' compensation laws.
4. Wrongful Termination or Discrimination Claims: Employees who feel they've been wrongfully terminated or discriminated against may file a lawsuit against the dealer.
Insurance Protection: Employment Practices Liability Insurance (EPLI) can protect businesses against claims by workers that their legal rights as employees of the company have been violated. This can include lawsuits related to wrongful termination, discrimination, sexual harassment, or hostile work environment.
5. Commercial Auto Accidents: If a dealer-owned vehicle causes an accident while transporting equipment, the dealer could face a lawsuit.
Insurance Protection: Commercial Auto Insurance can help cover the costs of such accidents. This policy typically covers bodily injury liability, property damage liability, medical payments, and collision coverage.
6. Property Damage: Natural disasters, fires, or theft can lead to substantial losses to the dealer's property, including the equipment in stock. Though not a lawsuit, this could be a significant financial hit to the business.
Insurance Protection: Commercial Property Insurance can protect dealers against such losses. It can help pay for repairs or replacements of damaged or stolen property, including buildings, equipment, and other items on the premises.
Commercial Insurance And Business Industry Classification
- SIC CODE: 5083 Farm and Garden Machinery and Equipment
- NAICS CODE: 541211 Offices of Certified Public Accountants, 541213 Tax Preparation Services, 541214 Payroll Services, 541219 Other Accounting Services
- Suggested Workers Compensation Code(s): 8803 Auditor, Accountant, or Computer System Designer or Programmer - Traveling, 8810 Clerical Office Employees NOC
Description for 5083: Farm and Garden Machinery and Equipment
Division F: Wholesale Trade | Major Group 50: Wholesale Trade-durable Goods | Industry Group 508: Machinery, Equipment, And Supplies
5083 Farm and Garden Machinery and Equipment: Establishments primarily engaged in the wholesale distribution of agricultural machinery and equipment for use in the preparation and maintenance of the soil, the planting and harvesting of crops, and other operations and processes pertaining to work on the farm or the lawn or garden; and daily and other livestock equipment.
- Agricultural machinery-wholesale
- Cream separators, farm-wholesale
- Cultivating machinery and equipment-wholesale
- Dairy farm machinery and equipment-wholesale
- Farm machinery and equipment-wholesale
- Garden machinery and equipment-wholesale
- Harvesting machinery and equipment-wholesale
- Haying machinery-wholesale
- Irrigation equipment-wholesale
- Land preparation machinery, agricultural-wholesale
- Lawn machinery and equipment-wholesale
- Milking machinery and equipment-wholesale
- Mowers, power-wholesale
- Planting machinery and equipment-wholesale
- Poultry equipment-wholesale
- Tractors, agricultural-wholesale
- Wind machines (frost protection equipment)-wholesale
Farm Equipment Dealers Insurance - The Bottom Line
As mentioned, in order to determine exactly what kind of farm equipment dealers insurance coverage you'll definitely need to protect your dealership, speak with a reputable agent who specializes in commercial insurance.
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
- Specialty Farm Risks
The agribusiness industry is a vital sector of the global economy, providing food, fiber, and other essential products to people around the world. However, it is also a complex and risky industry, with many potential sources of loss and damage. This is why the agribusiness industry needs commercial insurance.
One major risk in the agribusiness industry is natural disasters, such as floods, droughts, and hurricanes. These events can devastate crops and livestock, leading to significant financial losses for farmers and other agribusiness owners. Business insurance can help protect against these losses, providing a financial cushion to help businesses recover and continue operating.
Another risk in the agribusiness industry is the potential for accidents or injuries on the farm. Farming can be a dangerous occupation, and accidents can occur while working with heavy machinery or handling animals. Insurance can help cover the costs of medical treatment, lost wages, and other expenses related to these accidents.
In addition to these risks, the agribusiness industry is subject to various legal and regulatory requirements, such as food safety standards and environmental regulations. Noncompliance with these requirements can result in costly fines and legal action. Insurance can help cover the costs of legal fees and settlements, protecting businesses from financial ruin.
Overall, the agribusiness industry needs insurance to protect against the various risks and challenges it faces. Without commercial insurance, businesses in this industry would be vulnerable to financial losses that could threaten their survival. By investing in insurance, agribusiness owners can safeguard their businesses and ensure their continued success.
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).