You operate in a very competitive environment where pricing is driven down hard by customers, weather has a huge impact, disease can hit quickly and you battle to maintain the income/cost balance in your favour. You are critical to the food & drink supply chain across arable and livestock production. The often ‘tight’ strain on your finances mean that small-uninsured losses can have critical impact on the viability of your business. Usage of assets such as land to develop alternative income streams complicates your risk exposures. Some specific key risks are noted below.
Livestock disease, poor weather conditions. Machinery breakdown
Wrong Business interruption calculations as a result of various risks and trading activities
International competition & pricing
There is no point spending money on insurance if it isn’t going to pay out when you most need it. If a loss occurs the financial impact can be devastating, that’s why speed of claims settlement and loss recovery support are absolutely critical to you.
Our service is geared towards understanding every risk your business faces from research & development through to delivery of product. We do this by implementing a deep analysis of your trading activities, buildings construction, plant & machinery and every other aspect of your business including your Employee Health & Safety procedures. We really get in deep to understand every potential risk.
This is our job. We question everything, we get into the nitty gritty of it all, we help you identify and understand where it can all go horribly wrong. This means talking with you, sharing information, questioning your operating procedures and always watching your back. It means we can help ensure all claims are paid quickly and you are never facing reduced pay-out’s from insurers because of your underinsurance levels. Business interruption cover is a critical aspect in our advice and guidance.
The average farm or agriculture policy contains some 30,000 words of legal jargon; this is about the same length as a small novel. This document is packed full of conditions, warranties and exclusions…each one is landmine that will allow insurers to decline a claim. If a business also has sources of income from different commercial activities, different policies may be needed. That’s a lot of legal understanding needed over several different insurance policies.
Many farm & agriculture businesses borrow to finance their businesses. This inevitably means there is a monthly finance cost that must be repaid. In the event of a significant loss, there is a dependence upon the insurance claim payout to cover this cost. It is therefore critical that your business interruption insurance cover pays out when its most needed, and pays out the correct amount to ensure finance payments can be met.
Farming & Agriculture has the worst Health & safety record of all industries with around 1 person a week being killed. These incidents happen in a split second and devastate family members and other employees. Most Insurers wont offer low cost insurance cover to owners who pay little regard to the implementation of sound, monitored health & safety systems.
We met with the Managing Director of a 4,000-acre business to review his large farming and estate risk.
The business risk profile had changed considerably over the years as the farm assets had grown due to acquisition of other farms. This had also created an extensive Commercial Property Letting portfolio.
Our task was to check existing policy cover against the constantly changing risk profile and to try and reduce overall annual cost.
We felt that our extensive expertise in the Property sector could bring a different approach to benchmarking the premium against other Property Owners. The existing insurers didn’t have this experience.
We also found that certain limits of cover where dangerously low, particularly for Property Owners Liability where we recommended a change to twice its existing level.
In respect of the farming risk we discovered that major contracts, where the business carried out the “stubble to stubble” farming for third party landowners, were not properly insured. The business was exposed to liability risk if they caused damage to the third party crops by negligent spraying.
The existing insurance broker ‘said’ this exposure was covered but it was ‘missing’ from the client’s policy schedule. In the event of a claim, this could have exposed the business to serious loss as insurers could have refused to pay.
The claims experience on the Combined Farm and Property portfolio was excellent with a loss ratio equating to only 10% of the premium paid. We were able to combine all of these factors into a persuasive argument to our insurers that the cover should be improved and the premium halved.
Our current client count within this industry