Neal Bowman is a North Carolina farmer and customer member of Farm Credit. He is also an insurance professional who specializes in farms and agribusinesses in North Carolina, South Carolina, and Virginia. In part 1 he shared important considerations when looking for an insurance company that specializes in farms and agribusinesses. Here, he provides information on the different types of farm agribusiness insurance needs, which vary depending on your operation.
- Equipment insurance is important considering the cost of buying equipment. Any farming operation needs to cover its more expensive equipment. Typically, equipment insurance helps cover equipment in the event of theft, damage, fire, and mechanical failure. It doesn’t cover regular wear and tear. With some policies, it’s possible to get replacement cost coverage, which may be beneficial for the more expensive, newer pieces of equipment. Any time you buy or sell equipment, it is critical to touch base with your insurance professional to either add or remove an item from your policy.
- Property coverage is necessary to secure coverage on your farm buildings such as sheds, workshops, poultry houses, dairy barns, and on-farm stores. Often such coverage will include the contents, which can include expensive tools and barn equipment. It’s important to have a good inventory of assets that are part of your farm buildings to help determine level of coverage needed.
- Liability coverage includes premise liability for anyone that might get hurt on your farm when visiting. It includes bodily injury coverage for non-employees. There are additional items that may be covered under liability insurance, depending on your operation and your policy. For example, if needed, you may add pollution liability coverage which would cover your farm in the event of an accidental chemical spill or an overspray that might end up on someone else’s property. Considering the growing number of farms opening to the public as part of agritourism efforts, liability insurance is critical. Every farm is different and has different on-farm risks. If you have or are planning an agritourism component to your farm operation, it’s essential to talk with your insurance company to make sure you are covered for the different kinds of risks. Any time you add activities or features to your agritourism operation, touch base with your insurance professional to make sure the new activity is covered.
- Workers compensation is important if you have farm employees. North Carolina state law requires workers compensation on farms with 10 or more employees. It covers employees for injuries sustained on the job. It provides for loss of wages and it pays for medical expenses if there is a claim. It is a coverage option than can include the farmer if he or she chooses and it’s advisable to talk with your insurance professional about coverage and pricing.
- Business auto coverage insures vehicles used on the farm such as pickups, dump trucks, hauler trucks, flatbed trucks, and trailers.
- Umbrella policy provides additional coverage above and beyond your liability and other coverage. It’s an extra layer of protection for your assets. Both business auto and liability coverage maxes out at a certain level. The umbrella coverage provides additional coverage for farmers.
- Crop insurance and animal insurance are among the other types of coverage often considered by farmers. They may include loss of crops due to natural disasters or loss of animals due to disease or natural disasters.
Any insurance professional you work with should take the time to visit your operation to learn how to best address your risks and insurance needs.
“A farm can be one claim away from going under or having a catastrophic claim and my job is to help prevent that,” says Neal. “To help farmers understand their risks and to make sure they are properly covered has always been a real driver of mine to help make sure they have the right insurance in place.”
In part 1 of this 2-part series, Neal Bowman, who is with Insurance of the Carolinas, Farm & Agribusiness Division, shares what to consider when looking for an insurance company specializing in farms and agribusinesses.
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By Leah Chester-Davis