Like all businesses, farms purchase insurance to protect themselves from unexpected financial losses. While farms face many of the same risks as other businesses, they also have unique features that require special coverages. Many insurers offer agricultural (or farm and ranch) policies that are specifically designed for agricultural businesses. These policies combine elements of policies for homeowners, commercial properties and general liability.
For specific information about your company, contact one or more insurance professionals, as one source may not be able to meet all your needs. It's important to understand what types of losses your farm insurance policy covers to make sure you have the right amount of protection. For most farms or ranches, the most cost-effective and efficient way to obtain property and liability coverage is with a package policy that combines a variety of coverages in a single contract, similar to a business owners policy (BOP), but designed for a farm or ranch. You should consult your insurance provider and lawyer for clarification on the use of this type of work.
Yield-based crop insurance protects you against yield losses caused by natural causes such as drought, excessive humidity, hail, wind, frost, insects and disease. Crop insurance allows you to transfer inevitable production risks to an insurance company in exchange for paying a fixed premium per acre. The liability section excludes claims that arise from a business conducted in the insured location or carried out by the insured. The package policy for farmers does not cover any vehicles, including cars, trucks, or trailers designed for use on public roads.
Some insurers use standardized policy forms published by the ISO or the AAIS (an insurance advisory organization similar to ISO). There are three basic ways to calculate the value of something that has been lost or damaged due to insurable losses. The Uninsured Crop Assistance Program (NAP) provides financial assistance to growers of crops for whom there is no insurance coverage for multi-hazard crops and can be purchased for less than one acre of production per crop. Since insurance will be one of your top ten expenses, you should explore all your options when considering insurance alternatives.
Your workers' compensation insurance premium is based on the type of operation, the type of work your employees perform, and the amount of your estimated annual payroll. You must comply with conservation regulations and comply with highly erodible land and wetland conservation provisions in order to receive crop insurance subsidies.
