Running a farm is a big job, and you need to protect yourself financially from the many disasters that can befall this vulnerable enterprise. One of the most important ways to do this is with the right kinds of business insurance. Not sure what you need? Here are a few of the most important types of coverage you might need.
A farm insurance policy is designed to attempt to cover the needs of the large majority of small farms. It is a bundled package of policies that often includes things like farm buildings, equipment, and your personal residence (if on the farm itself). It may also provide protection for general liability in case there is an injury or damage to your property.
A farm policy may be the most convenient option and save money, but don't assume it covers 100% of your needs. Special circumstances still call for specific riders or added policies.
The purpose of your farm operation determines whether you need personal insurance or business coverage. Personal insurance policies, such as homeowners or auto insurance, are appropriate for farms that don't operate to make a profit.
If you grow food or livestock for your own needs but don't generally sell to customers, you may be able to save money and get sufficient coverage from a simple homeowners policy. But don't expect homeowners coverage to pay for claims related to operating as a business.
Crop insurance is a unique type of policy specifically targeted to the farm industry. Crop insurance can be purchased from private insurers or government programs, and it pays in the event your yield suffers many types of natural disasters. Multi-peril insurance typically covers things like droughts, flooding, storms, wildlife, pests, and even some losses from a decline in market prices.
When you sell goods to customers — both wholesale and retail — you risk someone claiming your products caused some sort of damage. And if a customer complaint is taken to court, product liability helps pay the legal bills and even any necessary damages or settlements. Product liability is particularly important if you package a line of products made from your meats, fruits, or vegetables.
Do you have these necessary farm insurance policies in place? Have you reviewed your current operations to determine if existing coverage is still adequate? If either answer is no, take the time to meet with an experienced insurance agent today.