Farm equipment insurance: Safeguarding your agricultural investments
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Interruptions to production will likely result in huge negative effects on revenue.
The importance of insuring farm machinery and equipment to safeguard your business can't be underestimated.
Luckily there are insurance options out there to financially protect you and minimise downtime in the event of a breakdown.
Here we discuss the best farm equipment insurance options, factors affecting the cost of insurance and tips to minimise downtime in the event of equipment or machinery breakdowns.
What kinds of farm insurance options are there?
There are various coverage options available through different agricultural finance partners to suit your business. Below we list some of the most frequently sought after types of coverage.
Be sure to get in touch with your insurance provider, they may be able to tailor your coverage to suit your specific needs.
1. Farm Income Protection
Safeguard your income by getting coverage for the many perils that threaten agricultural equipment that could negatively impact your revenue. Your policy may cover:
- Weather related risks
- Yield fluctuations
- Price volatility
Some policies may even offer coverage for revenue guarantee. Damage to equipment and machinery can have massive impacts to production and your income.
It is important to speak with your farm insurance provider to determine which coverage suits your individual circumstances.
2. Machinery Breakdown Insurance
Covers you in the event of breakdown of machinery or equipment crucial to production.
Policies may cover emergency repairs, machinery replacement and/or provisions for rental equipment hire depending on your coverage.
3. Farm Liability
Offers protection in the event of damage or injury to another person or property.
Policies may cover emergency first aid and treatment costs for others and your legal liability to pay compensation up to a prearranged sum.
4. Farm Livestock/Machinery/Buildings Insurance
Protects the crucial aspects of your business.
Policies often cover accidental damage to buildings including sheds, contents, fences, immobile machinery, hay, silage and grain.
How much does farm equipment insurance cost?
There are many factors that affect your premiums including:
- Equipment Valuation: Accurate valuation is crucial for determining coverage needs. This will affect the cost of your premiums.
- Deductibles: Higher deductibles lower premiums but will likely increase out of pocket expenses in the event of a claim.
- Location: Factors such as the area's climate and likelihood of crimes including theft and vandalism will affect your premiums.
- Safety Measures: Showing a commitment to risk mitigation by implementing appropriate safety measures, such as installing surveillance cameras and performing regular equipment maintenance, will likely lower your premiums.
Tips for minimising downtime during equipment breakdowns
1. Rent equipment
Renting necessary equipment keeps your farm up and running while repairs are being done. Your insurance coverage may include provisions for hiring rental equipment.
2. Keep an inventory of spare parts
Stock up on essential spare parts to minimise downtime and keep production losses down.
3. Emergency repair services
Establish a relationship with a reliable repair service early in the game. This could significantly improve their response time to you in the event of emergency equipment breakdowns.
In summary
Having the right kind of farm equipment insurance offers you peace of mind when unfortunate events occur.
Get in touch with a reputable insurance provider to determine which kind of coverage is best for you.
