Protecting Your Farming Operation With Insurance Coverage

The risks that a farm will have to face can be immense, and it is a reality that many farms are unprotected given their risk profiles. This can lead to the owners of the farm being at a much greater risk of encountering liabilities that could potentially force the farm to stop operating.

Avoid Assuming That Only Large Or Corporate Farms Need Insurance

Farm insurance is an important type of protection that can make it possible for a farmer to effectively mitigate their direct exposure to the liabilities of the farm. Unfortunately, small and hobby farms will frequently fail to carry this type of coverage. Farm insurance is able to protect against a range of liabilities that are unique to the farming industry. One common example of this coverage can be protection against crop loss. However, farming operations will also require highly specialized equipment for managing and harvesting the crops, and this type of insurance will be capable of offering effective protection for these expensive pieces of machinery and equipment.

Review The Insurance Requirements For The Farm's Mortgage Or Other Loans

For farms that are under mortgages, it is important to appreciate that there may be insurance requirements from the loan issuer. These requirements must be met to avoid the farm's financing being foreclosed. In addition to specifying the exact coverage amounts that must be carried by the farm, the policies can also indicate the liability protections that must be included with any insurance policy that is purchased for the farm. If you are uncertain as to the details of these restrictions with your insurance, speaking with your loan officer can allow you to clarify this before you accidentally purchase an insurance policy that does not provide the level of coverage that is needed.

Always Conduct A New Risk Assessment When Updating Your Insurance Policy

As with any other type of insurance policy, it will eventually be necessary for you to update the policy. When the time for this approaches, you will want to avoid assuming that the farm will have the same type of risk profile as it had the last time that you purchased insurance. It can be possible for the risks that a farm faces to dramatically change over time, and it will be necessary to ensure that any updated insurance policies are able to account for this risk. To make sure that your new policy is offering the protection that your farming operation is needing, a risk assessment should be conducted to make sure that you are aware of any new risks or liabilities that may have developed since you purchased your policy.

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