Q: Can I insure against the lost income for my farm in the event of a disaster befalling my property?
A: While it can be nice to imagine the lump sum you may receive after an insurance claim, the reality is your business can be loosing substantial income as a result of an accident to your property.
A burnt out combine might result in your insurer giving you a big cheque and a beast struck by lightening could see you receive the animals value at death. But what is the increased cost of hiring a combine to bring in your harvest while your insurer and an engineer inspect the wreckage? And what happened to the hundreds of pounds you lost when your cow died months before you intended to take it to market?
This lost income can be recovered, providing you take out the relevant ‘Loss of Revenue’ or ‘Business Interruption’ cover. To properly insure your business against the worst case scenario, you need to state your full annual turnover for each farming activity. Then you need to decide how long a disaster could affect your business income, for example; if you rear livestock for twenty months before going to market, it would be recommended that you cover your business income for two years.
As with your property insurance you can choose to widen your revenue cover by having storm damage, or theft. In most circumstances insurers need you to be insuring your property before they will offer a Business Interruption quote.
The cost of the cover is economical and can even allow you to save money on other areas of your insurance as your inputs and fattening livestock are automatically covered with most farm insurers.
We at Farmers and Mercantile are happy to answer any of your questions regarding this type of cover and can provide services for all your farm insurance needs.
Written by Alec Bond, Farmers & Mercantile – Ludlow, Shropshire published first in the Shropshire Farmer.
The Ayr office of Farmers and Mercantile have a vacancy for a Senior Underwriter to work in the busy Ayr farm insurance office. If you are interested in the position after reading the details please submit a CV and covering letter.
We are again looking forward to the Cereals event which this year is on the 12th & 13th June.
In case anyone is preparing for their visit early Farmers & Mercantile will be found on Stand 9-H-923.
In the last few weeks Farmers & Mercantile have been called in to inspect machinery at two farms where accidents had just occurred. The common threads of both cases were:
- Machinery inspections should have occurred before the accidents.
- HSE instructed both farmers to have their machinery inspected at the earliest opportunity
- Both farmers were unclear about the regulations governing the need for inspections or the benefits of having the equipment inspected.
All farmers need to be aware that if a piece of equipment is involved in an accident but has a valid inspection certificate it could be the difference between having a criminal record and a fine or not!
PUWER – Provision and Use of Work Equipment Regulations
LOLER – Lifting Operations and Lifting Equipment Regulations
Smallholders have similar liabilities as larger farmers only on a smaller scale; therefore they are best advised to place their insurance with a specialist broker whose focus is servicing the farming community. Farmers & Mercantile insure smallholdings throughout England, Scotland and Wales using a bespoke product that caters to smallholders’ lifestyles. To read more visit our smallholder insurance page.
The Northamptonshire office of Farmers and Mercantile, based in Sywell, are looking for an Internal Account Handler to work in the busy farm insurance office. If you are interested in the position after reading the details please contact us.
With seasonal cheer well and truly behind us all that remains is the seasonal weather that brings with it plenty of additional risks to your person, business and property. At this time of year we see a marked rise in the number of claims and it is perhaps worth preparing for the worst.
Slips and trips account for the most common form of work place injuries and employee claims. These can be surprisingly costly incidents as loss of earnings and medical treatment can often be incurred in the compensation. Wintery weather increases the likelihood of an accident especially when ice and snow fall. A common question is whether to grit or not in these conditions in case the grit itself is the cause of the slip? We would direct anyone with reservations about gritting to the Health and Safety Executive website where gritting is sited as being best practice on regular walkways. Stocking up on your own supply of salt this winter is an easy way of reducing your winter slip risk.
The business owner should use their own judgement or risk assessments, to decide when a work process is made unsafe by the weather and should be prepared to make bold decisions with regards to closing sites to the public or employees. A quick check of your insurance policy to ensure the correct levels of Employers Liability and Public Liability should then cover your business as a last resort if an accident occurs.
Storm cover is always handy insurance to have on your key buildings and loss of income cover as it includes damage by weight of snow. The number of buildings collapsing over the last few winters has seen a marked increase. Enquiries on adding this cover to a policy should be made as early as possible as most insurers will refuse to add Storm damage when bad weather is forecast, your best opportunity to buy the cover is always at renewal.
Written by: Alec Bond, Farmers & Mercantile, Ludlow, Shropshire
Farmers & Mercantile are looking forward to meeting hundreds of farmers at LAMMA 2013.
LAMMA 2013 is running on the 16th & 17th January 2013 at
The Newark & Nottinghamshire Showground
We can be found at Hall 8, Stand 822.. Please come along and see us.
The season of 1976 produced exceptional growing conditions, with a wet late spring followed by one of our hottest and driest summers on record and all capped off by one of the worst lifting seasons in the history of growing the crop. The outcome was a bonanza if you had any potatoes to sell.
2012 has turned into a year very near emulating that of 1976 with the lack of long dry summer days being the only exception. The price of potatoes is nonetheless similar and the market now sits precariously with growers wondering whether to shut the doors and pray or take advantage of what’s on offer now. Indeed the only resistance to further price rises is finding someone in the trade with the cash to pay for anything over £420 / tonne for grade 1 packing material. Those in the know reckon potatoes need to be insured for no less than £500 / tonne if they are reasonably good gear with storage potential.
With business interruption cover usually based on “sales” as opposed to “margin” it is important that sufficient cover is in place. In a normal season a 100 acre enterprise producing quality packing material would be adequately covered by a figure of £275,000. This year despite lower saleable yields cover needs to be more than double that figure. If you’re not sure call your broker. In a season of so many challenges it would be soul destroying to miss out on a legacy which may be talked about like 1976 for the next 36 years.
Written by Ed Davey, Yorkshire Farmers & Mercantile Office
In reviewing 2012, volatility and extremes come to mind. Whilst the weather made the headlines for all of the wrong reasons, volatility in the markets was just as evident. Agri inflation reached 13% with animal feed, fuel and fertilisers causing some pain to the farming industry. Fluctuating yields across the world further contributed to price increases due to supply issues within the market. The combineable crops sector experienced such volatility that the difference between market highs and lows was almost at the same level of the low with a difference of £98 /tonne between the two during 2012.
Decision making and risk management have never been more in focus. With UK farm borrowing up by 9% this year, farming families have their necks stuck out a little further than they would probably prefer. With all of the volatility and risks attached in farming, it’s never been more important to make sure that your insurance cover for both your inputs and income under your business interruption insurance is accurate and up to date. In the event that you have to rely upon your farm insurance policy for your financial well being it is essential it is in keeping with the times.
Written by Ed Davey, Yorkshire Farmers & Mercantile office