Does Farm Insurance Cover Loss Of Income Due To Damage To Machinery Or As A Result Of Storms?
Caeva O'Callaghan | January 3rd, 2024
The impact of a fire or natural disaster on a farm can be high. Can you get farm insurance for loss of income while you recover?
Yes. Under the business interruption section of your policy, you will be covered for loss of income due to your equipment suffering damage or as a result of a fire or storm.
However, you need to make sure that you have this cover on your policy, and that you are paying the additional premium. Otherwise this section will not apply.
In this article, we’ll cover the following questions:
- What is business interruption insurance?
- Which events are covered by business interruption?
- How do I get farmers’ business interruption cover?
Whether or not you want business interruption cover depends on the size of your farm, and how worried you are about the risks involved.
What is business interruption insurance?
Business income cover – or business interruption insurance – is designed to help keep your farm operational following a loss or disaster. This type of insurance replaces income that you’ve lost due to a fire, severe weather or other event included on the policy.
It can help you meet operating expenses while your farm is shut down for repairs or rebuilding, and it can be essential for getting back on your feet and making sure bills are paid.
Accidents, natural events or disasters can strike at any time and destroy physical property or livestock. Farms are at particular risk to these kinds of misfortune, as dealing with nature and inclement weather is part of everyday life.
When you purchase standard farm insurance, this cover will help pay for expenses such as repairs and rebuilding of structures on your property if they are damaged or destroyed, machinery and equipment, and even animals if they are killed or injured. But if something truly awful happens and your farm cannot operate as usual for a while, how will you cope with mounting expenses with no money coming in?
That’s where business interruption insurance comes in. This section of your policy is an optional add-on, but it’s necessary for any farmer who wants to protect their business against a catastrophe. It’ll give you peace of mind while you get everything back on track.
Which events are covered by business interruption?
Most policies will cover business interruption as a result of damage to your animals, business, property or machinery. This could happen for any number of reasons, but some of the most common are:
- Fire, storm or flooding
- Equipment or machinery breakdown
- Access issues
- Faulty supplies
It’s important to check your policy for exactly what events you are covered for, as insurance against flooding is very difficult – if not impossible – to obtain in certain parts of Ireland.
It’s worth noting that as the farmer or business owner, you will not have cover under employers’ liability insurance or public liability insurance if you are injured. This is because this insurance is specifically only to cover your employees and other people on your farm.
Business interruption insurance will cover your day to day operations, but it won’t pay for your hospital costs or personal recuperation.
To make sure you have adequate coverage, you must take out a personal accident section of your farm policy. This will provide you with weekly income in the event that you can’t work.
You select the term of income coverage that works best for your needs. Your policy can cover up to 100 percent of expected income for a period of 12 months, 18 months, or more.
How do I get farmers’ business interruption cover?
Give us a call, and we can arrange business interruption cover on your farm insurance policy. It may cost a little extra, but it’s well worth having.
The farmers who would most benefit from this cover are poultry farmers and large dairy farmers, as the potential for business interruption (or a full shut down) from one catastrophic event are high.
For example, if there is a fire in a poultry farm, one or more sheds being destroyed may result in thousands of displaced hens and loss of livestock. For dairy farmers, the impact of one milking shed out of commission may be high, especially if you need a large and expensive new milking machine relatively quickly.
Our farm insurance experts will be more than happy to discuss with you which options suit you and your farm. Just give us a call today, and we can walk you through what’s involved.
All Information in this post is accurate as of the date of publishing.