No two agricultural businesses are alike. However, all share the need for insurance. Here’s what you can do to protect your business.
What Insurance Do Agricultural-Related Businesses Need?
There is no single type of policy for an agricultural-related business. Some insurance companies do offer bundles, but these are combinations of several different insurance products that you may or may not need. It all depends on the nature of your operations.
Do You Have to Have Insurance?
There are a number of reasons you may need insurance if you’re in an agricultural-related area.
- It makes smart business sense to protect yourself against a catastrophic disaster or lawsuit that could otherwise put you out of business.
- State and federal regulations require insurance for specific types of activities.
- Your customers or business partners may require you to carry insurance as a condition of doing business with you.
What Kinds of Coverages Should You Look For?
You will likely need a combination of several different insurance products to meet your insurance needs. Here’s what you should look for.
Commercial General Liability Insurance
Commercial general liability insurance protects you against injuries or property damage you cause to others. This can include things like slip and falls, striking someone with debris while doing yardwork, or denting someone’s car. While commercial liability covers many types of liability situations, it’s important to understand that it doesn’t cover all situations. Each policy has its list of covered claims and exclusions. Certain specialized needs may require a different type of insurance, even if the claim is liability related.
Property insurance protects your own property against theft and physical damage. It may include the buildings you own plus your fixtures, inventory, tools, and other equipment. Covered incidents may include burglaries, fires, tornadoes, and similar disasters. Property insurance pays you to repair or replace what you lost. Depending on the type of property and your policy options, you may be reimbursed at either the current value of the item or the new replacement cost. As with general liability insurance, you may not have coverage for specific types of items unless you buy special insurance to cover them.
Commercial Auto Insurance
Your vehicles are one of the most common areas where you need specialized insurance. Commercial auto insurance can provide coverage for both your accident liability and damage to your vehicle itself. If you use personal vehicles in your business, keep in mind that your personal auto insurance may not cover you during business activities. Typically, any business vehicle you drive on public roads needs commercial auto insurance. For vehicles that remain on your property, it can vary based on whether they are covered by your general liability insurance or separate insurance based on your policy.
Business Income Insurance
When a disaster strikes your business, you often lose more than just the cost of repairing or replacing lost items. You may lose income during that time if you’re unable to work or sell what you were expecting to. Business income interruption insurance pays to replace that lost income so that you can continue to pay your bills, your suppliers, and yourself.
Workers compensation pays for your employees’ medical bills, lost wages, and related expenses if they get hurt on the job. In Wisconsin, it’s almost always required by law whenever you have employees. It’s smart to have anyway since you could otherwise be liable for those same expenses. Unlike other types of insurance, workers compensation rates are calculated based on a formula that’s set by law and based on your employees’ job classifications and your claims history.
You may not think of yourself as having cyber liability if you work in agriculture, but identity thieves are always looking to steal data. You may have customer billing info or sensitive business data on your computers. If it’s stolen, you could be liable for the losses your customers face even though you were also a victim of a crime.
No matter which part of the supply chain you operate in or whether you sell to businesses or consumers, selling food comes with a lot of liability. You may be responsible for any illnesses that happen from your products whether that’s due to improper storage, mislabeling allergens, or other causes.
Grain elevators come with substantial risks including someone getting trapped inside or the loss of your grain injury after a disaster. Due to their risk, grain elevators usually need separate insurance coverage.
If you keep livestock, it’s important to understand how they’re classified for insurance purposes. Often, you get a fixed per-animal reimbursement amount based on the type of animal. This may not be enough for more valuable animals that you breed or show. You can also get a policy that names each animal individually at its fair value.
Umbrella insurance gives you extra liability insurance for very large claims. It essentially extends your existing liability policies. It may be used after you’ve chosen the maximum limit on your underlying policy or if adding umbrella insurance is more cost-effective than raising the limits on multiple types of liability policies.
Talk to Your Insurance Agent
Insurance for agricultural businesses requires a customized solution. Your independent insurance agent is here to help. If you’re near Shawano or Brodhead, WI, contact Sagen & Associates Insurance to get started.