Chelsey Tucker graduated with a Bachelor of History degree from Metropolitan State University in 2019. She now writes about insurance with her specialty being life insurance and has been quoted on Help Smart Phone and MEL Magazine.

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Dan Walker graduated with a BS in Administrative Management in 2005 and has been working in his family’s insurance agency, FCI Agency, for 15 years. He is licensed as an agent to write property and casualty insurance, including home, auto, umbrella, and dwelling fire insurance. He’s also been featured on sites like Reviews.com.

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Reviewed by Daniel Walker
Licensed Auto Insurance Agent

UPDATED: Mar 19, 2020

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The United States produces a significant amount of the world’s food basket from its farming industry, both individual operations as well as corporate companies. However, both types of producers face similar risks if something goes wrong during the farming cycle.

Protect your farm with the right farm business insurance coverage. Compare business insurance rates and find the best policy by entering your ZIP code above. Save time and money by comparing quotes online!

Where a corporate farm may be able to spread its loss within its organizational chain, a private or family farmer has only one operation and no financial buffer. As a result, farm business insurance is a must, not just for unexpected accidents but for the ongoing viability of the farm from year to year.

Farm Business Insurance Provides Protection

Equipment damage, crop and/or animal loss, accidents, or natural disasters can significantly cripple a farm or wipe it out entirely in a short moment. The loss can incorporate the disappearance of generations of work and development, since many farms are handed down from grandparents to parents to children.

Farm business insurance provides a financial safety net that helps avoid a farm wipe-out due to an unforeseen situation. Similar to automobile or home insurance, farm business insurance is geared to provide the farmer some level of predictability and a buffer should a damaging situation far exceed what would normally be responded to by the farmer and immediate local help.

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Qualifications for Coverage

Eligibility is first determined by whether a property meets the insurance definition of “a farm.” Growing vegetables in your backyard doesn’t automatically make a property a farm. However, where there is production and the selling of vegetable or fruit products from that property, then the farm definitions seems to be easier to meet.

That said, just growing crops is not all that is involved. There are issues with workers, maintenance equipment, land management and erosion control, and general business liability for anyone hurt or injured by an activity associated with a farm.

The next step in deciding what insurance to apply requires detailing out all the activities and assets to be covered. If the insurance coverage is just to ensure a structure, a home or building insurance policy may be enough.

A farm business insurance plan not only provides financial coverage for the structure but for all the assets as well as the viability of the farm business and continued existence as a business entity. In this perspective, issues such as crop-loss, harvest goals, price market fluctuation, and pest damage all have an influence in the scope of coverage insured.

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Screening Questions

farm business insurance questions

Common insurance questions to narrow down what will be included in a farm policy include:

  • Identification of the type of crops or livestock involved,
  • How the farm’s products are packaged, distributed and sold to consumers,
  • The presence and use of farm workers and employees,
  • The presence of farm equipment and what kind it may be,
  • The type of visitors to the farm,
  • Temporary stocking and care of animals for boarding,
  • Will land and/or equipment be rented from someone else or owned, and
  • Building and structures on the farm.

With these issues answered, a farm insurance provider can then begin to form an idea of how much coverage to provide and what the premium cost will be for the farmer in comparison to similar farm operations covered.

Where specialty equipment or concerns need more than average coverage, insurers can also provide special sub-clause terms that specifically protect that asset or activity without necessarily sharing the higher-level coverage with the rest of the farm. Many times these specialty situations work the same way as a rider for jewelry in a homeowner’s policy.

Because a farm business insurance policy will involve many times both a living location and property as well as a business operation, farm policy are by their very nature a hybrid of different insurance coverage. Thus, there is far more customizing involved preparing such a policy to tailor it to the needs of the farmer involved.

Customization and Labor

At a minimum the farmer will want terms that protect all the valuable property, equipment and assets to be able to produce. He will also need a safety net in case his harvest gets wiped out in a bad year. Some sort of worker’s compensation or negligence coverage will be needed as well if the farm employs workers on the property who could get injured.

As a result, such policies are not cheap since farm problems have a higher risk probability with bad harvests than for instance just insuring a home. However, depending on the type of farming, in some cases premium costs can also be reduced by the support of government subsidies provided to ensure farms are put at more risk than necessary.

Some insurers may also change terms as well depending on trends and risk increases. For instance, in some regions smaller equipment theft may be rampant. Batteries for large-size farm equipment vehicles or copper fittings for pipes can be targeted. Insurers may not want to cover such issues or may exclude them to reduce related claims. Farmers then have to either find another insurer or deal with the damage out-of-pocket. Many times farmers absorb such expenses, being annoying but minor costs to the operations.

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Purchasing a Policy

The best way to obtain a farm business insurance policy involves window-shopping and comparing quotes from a number of insurance providers towards that end. A number of tools exist on the Internet for this purpose, making the research process faster. Alternatively, a farm could talk with local agents as well, but if time is of the essence the Internet brings the information home 24/7.

Enter your zip code below to quickly and easily compare insurance quotes from all the major insurance companies. Save yourself time and money by comparing rates online!