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Ensuring insurance cover keeps pace as the venture develops is vital.
The draw of the financial rewards diversification can bring to the traditional farm operation may be obvious, but the addition of insurance costs at the research stage of a business plan can be critical. Equally, ensuring insurance cover keeps pace as the venture develops is vital.
Whether selling hand-made ice-cream, letting commercial buildings or running a B&B business, the underlying insurance implications for a diversification venture will remain the same. In many cases, diversification insurance can be accommodated within existing farm policies, but it is crucial to obtain expert advice and information in advance.
“We advise clients and negotiate terms on their behalf,” explains Alexandra Wellings, managing director of independent farm insurance brokers Farmers & Mercantile.
“In some cases, we will shape the direction the business will go in order to keep the insurance costs under control and ensure the necessary risk management is in place to satisfy the insurers.”
Often, as a diversification project develops it grows into a greater size than the original farm business, and it is essential to regularly review operations to ensure insurance requirements are relevant and appropriate.
“We estimate at least 40 percent of our clients have some form of diversification venture, and these vary enormously. From camp-sites and glamping-sites, to corporate entertainment and DIY livery, each endeavour will have specific insurance requirements,” continues Mrs Wellings.
“It is worth remembering, that even simply letting a field is a form of diversification, and suitable cover should be included within your insurance policy.”
Mrs Wellings concludes, “It is always important to regularly review operations, and advise your broker of any changes or developments. Our on-farm advisers will regularly visit both farm and diversification venture to advise on requirements, identify any risks to employees and the public, and highlight potential perils that should be considered.”
The diversification market is expected to continue to grow, make sure you secure the expert advice to cover this ever-changing market.