Avoid worry on fluctuations in input and crop values
…with business interruption insurance policies
Farmers can avoid the worry about fluctuations in input costs and crop market values by insuring crops on a business interruption policy. That is the message from farm insurance broker Farmers & Mercantile (F&M).
F&M will include unlimited cover for inputs automatically as part of the cover on arable crops, at no extra cost. This takes the worry away from big fluctuations in market costs to replace lost inputs.
Increasingly, a higher proportion of farms will take early delivery of fertiliser, taking advantage of discounts from merchants, resulting in the inputs being stored on farm for a longer period. This represents a higher value at risk over a longer period, and without business interruption cover, a higher sum will likely need to be insured.
With the cover on crops based on a loss of income basis, crops will also be insured for future market values, rather than the spot price on the day of the loss. Therefore, fluctuations in values for both inputs and crops will be negated.
Nigel Wellings, F&M’s founding director explains, “It is extremely important to annually review the crop value, particularly based on the volatility of the market, market values and any rotation.
“Changing circumstances could see the crop value go down by 20 percent, and if this is the case, premiums should also go down accordingly. Conversely, if the crop value increases, it is important to increase the values insured.”
F&M can also include additional cost of working cover, in the event of a tractor, combine or drier fire. Insurers will pay the cost of hiring in replacement machines, or the costs of drying elsewhere, including transportation costs.