The importance of having farm insurance

So why is it important to renew this policy and what are the consequences of not having farm insurance in place?

A farm combined policy is made up of many sections, some of which are compulsory and some which are optional. A typical farm combined policy would consist of sections of cover such as farm buildings, farm contents, livestock, public and products liability, employers’ liability and environmental liability.

The whole purpose of an insurance policy is to offset the risk of financial loss to the business which can be an unknown cost against the predetermined fee of an insurance premium. The insurer agrees to accept the risk subject to the policy terms, conditions and limitations in return for a premium.

An insurance policy such as a farm combined policy, then provides peace of mind to the client so that should a major financial loss or event occur, it does not prevent the business from continuing to trade.

Liability insurance is of particular importance, as the settlement awards for third party injury or damage can run into very significant amounts of money. Employers’ liability is a compulsory cover for any labour on the farm, whether full-time, part-time or even voluntary, farm workers can be classed as employees.

Public liability is always recommended to cover awards for damages arising from members of the public suffering injury or harm. For example, visitors onto the farm making collections or deliveries, or livestock escaping onto the public road and causing a road traffic accident.

Insurance policies need to be renewed before the renewal date for continuous cover to exist. If a policy is not renewed, then the policy will lapse and there will be no cover in place.

Not only does this leave the farm exposed to financial loss, but it also means that any gap in cover needs to be declared before a new policy can be incepted. This gap in cover can be viewed as a moral hazard by insurers making them less likely to provide a quote when there has been no continuous cover in place and therefore no continuous claims history.

It is important to review insurance covers and make sure your policy meets your farms insurance needs. At AbbeyAutoline, we have a dedicated Agricultural team who can help review your policy and provide a competitive quotation for your farm.

For further information or advice please contact the specialist Farm Team at AbbeyAutoline, 08000 66 55 44 or visit https://www.abbeyautoline.co.uk/farm-insurance.