Grain Elevator Insurance Policy Information
Grain Elevator Insurance. A grain elevator, as he name suggests is a structure that is designed to stockpile or store grain. The buildings house vertical storage bins that make it easy to transport the grain that is stored within it.
The purpose of a grain elevator is to protect grain, an essential agricultural crop, from becoming damaged, because if it is left in a field, the quality of the grain can become compromised by mold, insects, birds, and rodents. These structures ensure that grain is stored in the best possible environment so that it remains safe, healthy, and can continue being used.
Grain elevators are designed for the long and short-term storage of bulk grain such as corn, soybeans, or wheat. Grain is brought to the elevator by farmers, usually by truck, and is inspected and sampled prior to unloading. If accepted, it is weighed, cleaned, dried, and moved into the elevator's storage silos by conveyor belt or other material handling equipment.
Once it is purchased, it is removed from the silo, weighed and loaded onto trucks, railcars, or barges for shipment. The grain elevator may operate as an adjunct to milling or feed manufacturing plants. Some large grain elevators broker grain between farmers who produce the grain and agribusiness companies which purchase it in bulk.
As the operator of a grain elevator, it's safe to say that you offer a valuable service. Like any type of business owner, it's important that you protect your business from the risks that you are exposed to.
What's the best way to do that? By investing in the right type of grain elevator insurance coverage. Why do grain elevator owners and operators need insurance? What type of coverage should they have? In this guide, you'll find the answers to these questions and more.
Grain elevator insurance protects granaries 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 granary insurance questions:
- What Is Grain Elevator Insurance?
- How Much Does Grain Elevator Insurance Cost?
- Why Do Grain Elevatorms Need Insurance?
- What Type Of Insurance Do Grain Elevators Need?
- What Does Grain Elevator Insurance Cover & Pay For?
What Is Grain Elevator Insurance?
Grain elevator insurance is a type of insurance coverage specifically designed for businesses that operate grain elevators. These elevators are used to store and transport grains, such as wheat, corn, and soybeans, to and from farms and other locations. The insurance provides protection for these businesses against the potential risks and losses that can occur as a result of their operations.
Grain elevator insurance typically includes coverage for property damage, including damage to the elevator itself, as well as the grains stored inside. This can include damage from fires, storms, and other natural disasters. In addition, the insurance may also cover losses caused by theft, vandalism, or other criminal acts.
The insurance may also include liability coverage, which can protect the business in the event that someone is injured or their property is damaged as a result of the business's operations. This can include coverage for accidents that occur on the property, such as slips and falls, as well as any damage caused by the elevator's operation.
Grain elevator insurance is important for businesses that operate these facilities, as it can help them protect their assets and operations from potential losses and liabilities. This can help them continue to operate and grow their business, even in the face of unexpected events or accidents.
How Much Grain Elevator Insurance Cost?
The average price of a standard $1,000,000/$2,000,000 General Liability Insurance policy for small grain elevators ranges from $67 to $89 per month based on location, size, operations, claims history and more.
Why Do Grain Elevator Need Insurance?
Grain elevators are an essential part of the agricultural industry, serving as storage facilities for harvested crops and a hub for distribution to markets and processors. These facilities handle large quantities of grains and other agricultural products, and the potential for accidents, equipment failure, and natural disasters can put the entire operation at risk. This is why insurance is an essential component for grain elevators to have in place.
One of the major risks for grain elevators is the potential for fire. These facilities often store large quantities of combustible materials such as grain and hay, and even a small spark can lead to a devastating fire. Insurance can provide protection for the cost of repairs and rebuilding if a fire occurs.
Another risk for grain elevators is equipment failure. These facilities rely on a wide range of equipment to operate, from conveyor belts and elevators to trucks and tractors. Grain elevator insurance can provide coverage for repairs or replacement of equipment if it fails, which can be critical to keeping the operation running smoothly.
In addition to these risks, grain elevators are also subject to the effects of natural disasters. Floods, tornadoes, and other natural events can cause significant damage to facilities, equipment, and crops. Insurance can provide financial protection to help cover the costs of rebuilding and recovery in these scenarios.
In conclusion, grain elevators need insurance to protect against the risks and financial losses associated with fires, equipment failure, and natural disasters. With the right coverage in place, grain elevators can ensure that they have the resources to continue operating in the event of an incident, and protect against significant financial losses. So, it is important for them to have insurance coverage to safeguard their business against unexpected events.
What Type Of Insurance Do Grain Elevator Need?
The specific type of grain elevator insurance coverage that grain elevator owners and operators will need depends on several factors; where your operation is located, the size of your operation, and how many people you employ, for example.
Since the insurance requirements for grain elevator owners and operators do vary, it's very important to consult with an insurance broker who specializes in commercial policies so that you can ensure you have the coverage you need.
With that said, here's a look at some of the different types of coverage that grain elevators should have:
- Commercial Property - This type of coverage is designed to protect your commercial property and the contents within it from acts of nature, theft, and vandalism that may impact your property. For example, if a fire were to break out, commercial property insurance would help to cover any repairs that may need to be made, and it would help to replace the grain that you lost.
- General Liability - You'll also need to have a commercial general liability insurance policy in place. This kind of coverage protects you from third-party property damage and personal injury liability claims. For example, if a client were to suffer an injury while making a delivery to your grain elevator and they filed a lawsuit against you, this type of coverage would help to cover your legal defense fees, as well as any settlements that you may be required to pay.
- Workers' Compensation - If you employ a staff, workers' comp insurance is a definite must. If any of your employees suffer a work-related injury, this type of coverage will help to pay for any medical care that they may require, as well as replace any wages that the employee may lose if they are unable to work while they are recovering.
These are a few examples of the type of grain elevator insurance policies you'll need to have operating a granary.
Grain Elevators' Risks & Exposures
Premises liability exposure is moderate. Customers, dealers, and inspectors regularly visit the premises. Visitors must be provided with appropriate safety equipment and be accompanied at all times by an employee. Grain can be slippery. Careful attention to housekeeping is required to prevent injury from slips, trips, and falls. Floor openings should be covered or protected with railings.
Good controls of the grain loading and unloading operations are necessary to prevent injury to visitors. There should be a disaster plan in place for unexpected emergencies.
The elevator may have a railroad sidetrack or dock. An employee should verify that no one is in the path of an incoming or outgoing train. Railroad tracks, piles of grain, and conveyors can be attractive nuisances for trespassers. The premises should be enclosed by fencing with "No Trespassing" signs posted. Dust explosions and fires could damage adjacent properties.
Products liability exposure can be high due to the potential for contamination of grain. Grain must be properly dried to prevent molds and fungus from growing. Fumigation processes must be carefully monitored. Chemicals used to control vermin must be FDA approved and carefully administered to avoid affecting the grain.
If the grain elevator contracts for the delivery of grain to customers, a written guarantee should be obtained from carriers that the trucks have not been previously used to transport chemicals or other contaminants.
Environmental impairment exposure may be high due to fumigants used to control mold and fungus, pesticides used to control pests and vermin, and lubricants and solvents used for maintaining and fueling machinery. Control of contaminants should be carefully monitored, and records should be kept. Waste disposal must meet all state and federal regulations.
Workers compensation exposure is severe due to numerous life-threatening hazards including suffocation from entrapment in grain bins, falls from heights, crushing injuries or amputations from grain handling equipment, and fires and explosions from accumulations of grain dust.
Any worker entering a grain storage area or performing equipment maintenance at heights should be provided with a body harness and maintain contact at all times with an attendant. Workers should not enter grain storage areas when the grain is being moved into or emptied from the facility.
Man lifts and conveyors should be regularly inspected and equipped with emergency shutdown switches. Man lifts should not be used for moving grain, and employees should not be permitted to ride on conveyors. All electrical equipment should be explosion-proof, have static eliminators, and be grounded.
Slips and falls are common as grain can be slippery. Floor openings should be covered or protected with railings. Careful attention to housekeeping is required. Much of the work can be manual and can result in lifting or back injuries such as hernias, sprains, and strains.
Ongoing exposure to mold and fungus spores, fumigation chemicals and pesticides can cause a variety of respiratory illnesses. Continued exposure to high noise levels can cause hearing problems. Appropriate safety equipment is required.
Many workers are seasonal and may not have the benefit of proper training and experience. If the elevator has a dock for loading onto barges, the elevator may need U.S. Longshore and Harbor Workers coverage in addition to workers compensation.
Property exposure is severe due to the combustibility of grain dust and multiple sources of ignition. Accumulations of grain dust provide the major source of fuel for an explosion. Gases can build up in wet grain, resulting in spontaneous combustion and a fire that is accelerated by the grain dust. Ventilation, dust control and removal systems, use of moisture probes, and proper attention to housekeeping to reduce dust accumulations on exposed surfaces such as floors can reduce the exposure.
Ignition sources include extensive electrical wiring for grain processing equipment, such as conveyor belts and grain dryers. Electrical wiring, motors, belts, and other equipment must be grounded to prevent static buildup and discharge, and be inspected and maintained on a regular basis. All electrical wiring and fixtures should be conduit and be explosion-proof. Smoking should be prohibited throughout the facility.
Grain elevators may be targeted by vandals. Appropriate security controls must be taken including physical barriers to prevent entrance to the premises after hours and an alarm system that reports directly to a central station or the police department.
Business income exposure is very high due to the seasonality of operations and the unavailability of temporary replacement facilities.
Inland marine exposure comes from accounts receivable if the grain elevator bills customers, bailees, computers for tracking inventory, contractors' equipment, and valuable papers and records for customers' and suppliers' information. Duplicates must be kept of all data to permit easy replication in the event of a loss.
If the elevator holds grain for others, there will be a high bailees exposure. The equipment used to process the grain may require contractors' equipment coverage. Goods in transit coverage may be needed depending on when the title of purchased grain passes to the buyer as the elevator may be responsible for the goods until delivered to the purchaser.
Crime exposure is from employee dishonesty. Pre-employment background checks, including criminal history, should be performed on all employees handling money. Grain elevator operations involve a number of transactions and accounts that can be manipulated.
Loading docks should be supervised to minimize employee theft of goods. There must be a separation of duties between employees handling deposits and disbursements and reconciling bank statements.
Regular audits, both internal and external, are important in order to prevent employee theft of accounts. Receipts must be provided for all payments and compared to money received.
Business auto exposure is limited because most grain is delivered by the farmers, and pickup is by the buyers or by rail. If the elevator contracts delivery with outside providers, a certificate of insurance should be kept on file verifying liability coverage. If vehicles are owned, all drivers must have a valid driver's license with acceptable MVR. Vehicles must be well maintained with records kept at a central location.
What Does Grain Elevator Insurance Cover & Pay For?
Grain elevators can face lawsuits for a variety of reasons, such as property damage, employee injury, environmental harm, and contractual disputes. Insurance can protect grain elevators from financial losses associated with these lawsuits, as well as provide funds for legal defense.
Here are some examples of how insurance can help pay for lawsuits that grain elevators may face:
Property damage: Grain elevators may face lawsuits from neighboring property owners who claim that their property has been damaged due to the elevator's operations. For example, dust and debris from grain handling can cause damage to nearby crops or structures. In this case, property damage liability insurance can help cover the costs of the lawsuit, including legal fees and damages awarded to the plaintiff.
Employee injury: Grain elevators are hazardous environments, and employees can suffer injuries from falls, equipment malfunctions, or exposure to harmful substances. Workers' compensation insurance can help cover the costs of medical treatment and lost wages for injured employees, as well as protect the grain elevator from lawsuits filed by injured employees.
Environmental harm: Grain elevators may face lawsuits and fines from regulatory agencies for environmental harm, such as pollution or contamination of soil and water. Environmental liability insurance can help cover the costs of cleanup and remediation, as well as provide funds for legal defense against regulatory actions.
Contractual disputes: Grain elevators may face lawsuits from suppliers, buyers, or other parties with whom they have contractual agreements. Commercial general liability insurance can help cover the costs of legal defense and damages awarded in breach of contract lawsuits.
Overall, insurance can provide valuable protection for grain elevators facing a range of lawsuits and legal challenges. By transferring the financial risk of lawsuits to an insurance company, grain elevators can focus on their operations and minimize the impact of legal disputes on their bottom line.
Commercial Insurance And Business Industry Classification
- SIC CODE: 4221 Farm Product Warehousing And Storage
- NAICS CODE: 493130 Farm Product Warehousing and Storage
- Suggested Workers Compensation Code(s): 8304 Grain Elevator Operation & Local Managers, Drivers
Description for 4221: Farm Product Warehousing And Storage
Division E: Transportation, Communications, Electric, Gas, And Sanitary Services | Major Group 42: Motor Freight Transportation And Warehousing | Industry Group 422: Public Warehousing And Storage
4221 Farm Product Warehousing And Storage: Establishments primarily engaged in the warehousing and storage of farm products. Establishments primarily engaged in refrigerated warehousing are classified in Industry 4222.
- Bean elevators, except sales
- Cotton compresses and warehouses
- Farm product warehousing and storage, other than cold storage
- Grain elevators, storage only
- Potato cellars
- Tobacco warehousing and storage
- Wool and mohair warehousing
Grain Elevator Insurance - The Bottom Line
To find out what kind of grain elevator insurance coverage you'll need to fully protect your granary, speak with a skilled commercial broker who specializes in business insurance.
Additional Resources For Warehouse And Storage Insurance
Learn about small business warehouse and storage insurance - which protects storage and warehouse facilities and protects their inventory from property damage from fire and weather, vandalism and theft and liability coverage as well.
The warehouse and storage industry is a crucial part of the supply chain for many businesses. Warehouses and storage facilities house valuable goods and products that need to be protected from various risks such as fires, natural disasters, and theft. These risks can lead to significant financial losses for businesses if they are not adequately insured.
Commercial insurance in the warehouse and storage industry helps to cover the cost of damages or losses to stored goods due to unforeseen events. This can include coverage for damages caused by fires, storms, and other natural disasters, as well as theft and vandalism. Without business insurance, businesses could be left to cover the cost of these damages out of pocket, which can be financially devastating.
In addition to covering physical damages, warehouse and storage insurance can also provide liability coverage. This can protect businesses from legal action if someone is injured on the premises or if damage is caused to a third party's property.
Overall, the warehouse and storage industry needs commercial insurance to protect against financial losses and legal liabilities that can arise due to unforeseen events. Without insurance, businesses in this industry would be at a much higher risk for financial ruin.
Minimum recommended small business insurance coverage: Building, Business Personal Property, Business Income and Extra Expense, Accounts Receivables, Computers, Contractors' Equipment, Valuable Papers and Records, Warehouse Operators' Legal Liability, General Liability, Employee Benefits, Umbrella, Hired and Non-Owned Auto and Workers Compensation
Other commercial insurance policies to consider: Earthquake, Equipment Breakdown, Flood, Goods in Transit, Cyberliability, Employment-related Practices, Environmental Impairment, Business Automobile Liability and Physical Damage, Stop Gap Liability and U.S. Longshore and Harbor Workers Coverage