As the owner of a small business, you have enough to worry about without also having to remember insurance paperwork and what’s covered and what isn’t.
Farm insurance, while different from other types of small business insurance, has certain similar elements that can make it confusing if you don’t know what you’re doing.
In this guide, we’ll go over everything about farm insurance so that you can understand everything about it and figure out what type of coverage would be best for your unique needs as a farmer.
What is farm insurance?
Farm insurance is a package of policies that covers your farm and everything on it, including structures and personal property. A typical policy will include a comprehensive all-risk insurance component as well as liability coverage to protect you against accidents and injury claims related to your operation. (Learn more in our overview of farm liability insurance.)
How much does farm insurance cost?
Farm insurance will vary based on a variety of factors. Some of those include what you’re protecting your farm from, how much you’re insuring and if you insure one or multiple locations.
For example, covering just a single structure costs $22 to $56 per year in Colorado, while an all-risk policy that covers all structures and also protects against livestock and business income can cost anywhere from $1,800 to $12,000 annually.
It’s also important to note that different insurers may offer different rates for similar policies – so shop around! No matter what state you live in or what company you use though, here are some of the most common risks farm insurance can protect against
Selecting a carrier
Not all farm insurance providers are created equal. Some companies specialize in serving farms, others may be great for your personal auto policy but not for your needs as a farmer.
It’s important to thoroughly research several carriers before deciding which one is right for you and your farm. For more on how to do that, read our post How to Find Farm Insurance That Fits Your Needs.
Types of coverage
Two of the most important types of insurance for any farm are property and liability coverage. Liability insurance is also known as general liability, and it covers claims related to accidents that occur on your property or when someone is injured on your land.
It can also protect you from lawsuits brought against you by employees or customers who get hurt because of something related to your business (if a customer slips and falls in your parking lot, for example). Property coverage pays for damages to buildings, crops, livestock and anything else that could be damaged as a result of a covered event such as fire or storm.
In general, all farm buildings are considered real property so they’re covered under standard real estate policies.
Tips for selecting coverage limits
Two things to keep in mind when you buy insurance for your farm are coverage limits and deductibles. Covers: The amount a policy will pay out per claim i.e., if someone falls down and hurts themselves on your property, you’d need to pay for medical bills up to that limit.
Signing up for your policy
Once you have a good idea of what kind of coverage you’ll need and how much it will cost, call around different insurers. There are many insurance companies to choose from so it’s important to do your research before deciding which one is right for you.
Protecting your assets
In most cases, you’ll need both liability and property insurance to protect your farm. Liability insurance covers accidental damage or injury to another person or their property; property insurance covers damage caused by disasters such as hurricanes, floods, and fires.
It’s not just farms that can get caught in natural disasters either—the Centers for Disease Control found that between 1983 and 2012, 1.7 billion acres of forest were lost due to wildfires. The US National Forest Service reported a total of more than 714 million acres burned during that period—almost 15 times as much area as was lost from development.
How to file a claim
If your property is damaged by a severe storm, fire, or natural disaster, you will likely need to file a claim with your insurance company. Keep in mind that not all policies cover every potential risk.
Start with an inventory of your assets and then check with your agent to ensure you are covered for any damage. Get claims forms, medical forms and repair quotes before anything happens; that way you will have everything ready if disaster strikes.
Getting ready for storms, fires, and more
Protecting your farm in today’s world is more important than ever. A good insurance policy can help protect you against unexpected incidents, like storms or fires, which might strike and wipe out your harvest.
But with so many different types of insurance policies out there, how do you know which one is right for you? We’ve created a list of 10 basic types of farm insurance policies to help make things easier. Our list outlines common names for each policy type and includes links to help you understand what each one offers.