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.
We are again looking forward to the Cereals event which this year is on the 12th & 13th June.
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.
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.