Whether you’re operating a large dairy farm, a small poultry farm or anything in between, farming is a business. Like running any business, risks can be mitigated with a quality insurance policy.
First, let’s get technical…
What is the definition of a farm for insurance purposes?
“Farm” denotes a tract of land devoted to agricultural purposes with a reasonable expectation of profit, with or without a dwelling and/or outbuildings.
This includes the retired farmer, who was actively farming in the past and still has land that he rents or leases to a third party who continues farming it with a reasonable expectation of profit.
Learn about hobby farms.
WHAT IS FARMING INSURANCE?
Farming isn’t the same as other businesses so when it comes to farms there is no such thing as a one size fits all insurance package.
Every farm is unique in terms of its size, type and operations so each farm insurance policy should be customized to suit the specific needs of the farm.
WHAT DOES FARM INSURANCE COVER?
Farm Liability Insurance
Fully operational farms require full liability coverage. When working with heavy machinery or livestock, the risks of operating a farm usually exceed those of most other types of businesses.
Because of this, making sure you have enough liability coverage to protect you in the event of an injury or property damage as a result of your operation is crucial.
How much liability coverage is enough? At least $1 million liability coverage should be included in every farm insurance policy. However, for some farms, it is often recommended that they increase their liability coverage to $2 million, given the uncertainty of liability claims.
Farm Equipment Insurance
Most farms have invested heavily into large pieces of equipment that are crucial to their operations.
The health and security of this equipment are vital to the success and stability of a farm so they must be insured. Farm equipment insurance is meant to protect in the event of equipment loss or even breakdown (with the proper coverage in place). No farmer has time to let an equipment breakdown impact their growing season.
Farm Home Insurance
While farm insurance does cover buildings used for livestock, grain storage and machinery, private home insurance is another important aspect that must be assessed and insured properly. This may be included under the same farm insurance policy, or depending on your insurer may be a separate policy for your residence, including all contents detached private structures like your garage.
Farm Livestock Insurance
Whether or not the purpose of a farms livestock is to generate income, such as is often the case for dairy, poultry and hog farms, livestock living on the farm can and should be covered by insurance. This includes saddle animals like horses.
Farm Auto Insurance
The type of auto insurance a farmer needs for their vehicle depends on what each vehicle is used for. If a farmer uses a truck strictly for farm purposes such as hauling material, it can be classified as a farm truck and enjoy the benefits of a lower insurance rate.
However, if a vehicle is used for personal use away from the farm property then it would need to be rated as such without any discounted farm rate.
WHAT DOES FARM INSURANCE COST?
There is not a standard pricing chart when it comes to the cost of farm insurance. A good insurance company will break down all of your different needs (listed above) to determine your specific farm’s risk, insurability and insurance rates.
Factors that can determine the cost of farm insurance include:
- number and type of buildings
- size and income of the farm
- amount of farm equipment
- type and amount of livestock
- special coverage requirements
Erie Mutual Insurance proudly serves the business, home, farm and auto insurance needs of members throughout Southern Ontario including Haldimand, Niagara and Hamilton. Please contact us anytime and we would be happy to evaluate your farm and provide more information.
Please contact us with any questions you may have about this or any other topic related to your insurance.