Know Risk is a community education program designed by the Australian and New Zealand Institute of Insurance and Finance (ANZIIF) to improve our understanding of insurance and how it relates to managing the many risks we all face in life.
Farm insurances: a few basics
As with any business, owning and operating a farm can leave you open to a range of risks, all of which can be helpfully mitigated by appropriate insurance covers. If the business you own is farming-based, you might be pleased to find that, when it comes to insurance cover, you have a range of options.
Let’s have a look at those options so that you know what they are and can then go ahead and do some further investigation to make a decision about what’s right for you.
What are my options?
There is a significant number of insurance types that may be relevant to your farming business. It’s also worth remembering that some insurers will have more options than others.
There are some insurers who offer specialised farming-related insurance — for example, crop, livestock and farm motor insurance.
Most insurers also offer farm insurance packs, from which you will be able to choose from a range of different insurance types and then customise an overall policy that’s right for you. Others still will enable you to purchase individual policies if that’s what you’d like to do.
Given that specialised and individual policies are a little more self-explanatory, we’re going to focus a little more on farm insurance packs and detail a little more about the types of insurances available for inclusion within those packs.
Are there different types of farm packs?
Well, that depends on the insurer.
Some insurers offer different types of farm packs for you to choose from, depending on how big your farm operation is and what you’d like to cover.
Some insurers may offer farm packs aimed at smaller, more hobby-like, farms that don’t require larger, more comprehensive covers. And then there are insurers who offer farm packs aimed at larger farming businesses, where the range of covers will be a little larger in scope. Some insurers will also offer personal farm packs, which include things like home and contents, personal illness and injury, and motor vehicle coverage.
Other insurers may offer just the one type of farm pack, which can then be massaged, if you will, to cater to your business — that is, the range of covers on offer within the farm pack will be quite varied, so the farm pack ends up essentially being specialised anyway.
What covers to farm packs typically offer?
As you can see from what has been discussed above, farm packs can vary quite significantly between insurers. But, in general, the following types of insurance are usually offered as part of a farm business pack:
- Farm property — including buildings and contents
- Hay, grain and livestock, etc.
- Farm machinery — including theft and breakdown
- Fire — for both inanimate objects, like fencing and machinery, and livestock
- Domestic property and contents
- Personal accident and sickness
- Motor — for farm and personal vehicles
- Farm working dogs
- Business interruption
- Business liability
- Road transit
The most beneficial aspect of a farm pack is that you can then pick and choose from the list of insurances on offer to create a policy that provides insurance for the things that are of most importance to you.
Should I go with an insurer that specialises in farming?
In Australia and New Zealand, there are a number of insurers that cater more specifically to farming communities. However, there are also many insurers who don’t specialise in farming-related insurances but still have insurance policies that may be beneficial for your farming business.
We know; we didn’t really answer the question there. But the reason for that is that when it comes to small businesses and insurance, there is no one size fits all. Every business and business owner is unique, both in terms of their operations and the insurance policies those operations need.
If you are unsure about what kind of insurer will best meet your needs, it’s advisable that you arrange to meet with a trusted business adviser or an insurance broker or insurer, perhaps even one who specialises in farming-related insurances. These types of people will be able to ask you some targeted questions about your business and will have the knowledge required to help you make a determination about the product that most closely matches your needs.