Farms and ranches have plenty to think about daily. Are the animals or crops healthy? Are buildings or machines in need of repair? What weather may threaten production in the future? For agribusinesses that are considering expansion, these questions and more become a focal point. Chief among them is which insurance policies are required when a farm expands into new processes, products, and services?
Your farm and ranch insurance policy should grow with your operation. With core policies that serve as the backbone of smaller farms, other protections are necessary as a business grows in productivity, equipment, and specialization. Similarly, even old, reliable policies should be updated when the company expands to make sure their inclusions remain relevant.
Here are some tips on customizing farm and ranch insurance to fit your growing business and prevent problematic coverage gaps.
Equipment Breakdown Insurance
Most farms begin with equipment breakdown insurance as part of their baseline protection. However, as the enterprise grows, it is important to reevaluate what is covered under this policy. Where a smaller farm might rely on a single tractor, expanding ranches may soon need harvesters, bailers, presses, milking systems, and more.
All of these pieces of equipment can pose a significant financial burden if they break down or are damaged. Equipment breakdown insurance protects the farm from many of the consequences of a machinery breakdown. By keeping production on track, this insurance can remove the financial implications of a breakdown and maintain workflow.
General Liability Insurance
Every farm should have general liability insurance. However, the exact coverages may need to be expanded if the farm grows. For instance, a farm that once only produced pasteurized milk for the local community may now send it out across the country; with this success comes greater risk. Liability insurance should cover this growth by expanding its protections and addressing new scenarios, such as illnesses caused by crops.
Workers’ Compensation Insurance
Workers’ compensation is typically required before a farm can hire help. However, farms should consider reevaluating their workers’ compensation policy when they grow to make sure it can support the new number of people and that its injury protections are relevant to the latest processes and machinery incorporated into the business’ growth.
Crop and Livestock Insurance
One of the most common areas in which farms and ranches grow when they expand is in their product offerings. Suppose a business has crop and livestock insurance. In that case, the company should carefully review the policy and update it to accommodate any new products cultivated at that facility.
Home and Contents Insurance
A home and contents policy can protect all buildings within the farm’s grounds. This becomes especially important when the enterprise grows and more structures are necessary. Check to make sure that the policy expands alongside the number (and type) of buildings.
Balancing Your Insurance Costs To Your Coverage Needs
No matter how your farm or ranch develops, it is always essential to balance the coverage costs with that protection’s completeness. To minimize expenses without compromising on policy quality, be sure to:
- Invest in training – Trained employees pose less of a risk to insurance companies because they are less likely to make basic mistakes. Thus, an insurer may account for this training when determining the policy costs.
- Use safe practices – Farms that abide by manufacturer instructions and follow proper procedures are deemed safer than those that do not. Insurance agencies consider the farm’s practices when determining the price of insurance.
- Bundle – Bundling multiple policies with the same insurance carrier can save on administrative fees. Many insurers encourage bundling as a tactic to save money without changing coverage.
- Choose appropriate policies – It may seem tempting to choose the cheapest policy option, but this can financially harm farms later. Choose insurance with the proper coverage amounts to avoid high out-of-pocket costs.
- Use industry pros – The best people to recommend farm and ranch insurance are insurance agents with years of experience insuring these types of businesses. Insurance agencies without dedicated farming subsections often do not know the appropriate coverages and amounts.
Customize Your Farm & Ranch Insurance for Your Expanding Business
If your farm has recently expanded or you plan to grow your business, choosing the right insurance coverage is as essential as purchasing new equipment or planning for new buildings. The professionals at Burton & Company can help you understand how your insurance needs may change as your farm transforms into something new. Contact Burton & Company to discuss your insurance needs and create a complete protection package.
