6 Things Every Ontario Dairy Farmer Should Consider for Insurance
Posted on Monday, May 01, 2017
We have compiled a list of six important insurance considerations for Dairy Farmers of Ontario. These are coverages that some dairy farmers have not taken advantage of, along with examples of why they are very important.
Keep reading to see if these examples may be relevant to your dairy operation…
1. EQUIPMENT BREAKDOWN
Consider this example – when you buy a refrigerator, the salesperson will suggest the extended warranty to cover the cost of repairs if it breaks down. Now imagine that fridge is your milking robot. If it breaks down, this could be a serious problem… and a big expense. It would be very challenging to milk a herd of 400 cattle twice per day with the robot out of service.
Equipment Breakdown covers repair expenses related to the sudden and accidental failure of machinery on your dairy farm. This coverage is crucial for your milking machinery, feed mixers, hammer mills, generators and solar panels. This coverage will assist with getting your machinery back up and running in a timely manner.
2. LOSS OF INCOME
Loss of Income coverage replaces your milk cheque in the event of an insured loss. This payment continues until you are receiving the same level of income as you did before your loss (for up to 12 months).
Consider the drop in milk production if your herd is moved out of a barn after a fire. There may be another drop in production after the herd is moved back into a reconstructed barn. Loss of Income coverage can assist in maintaining your expected income.
3. MILK CONTAMINATION
Often, dairy farmers do not anticipate a milk contamination problem. The tanks are filled and the truck picks up the milk like any other day without any problems. What if one of your cows is being treated with medication and their identification band falls off and she is milked? To make problems worse, what if the milk truck accidentally mixes that contaminated milk with everyone else’s? You may be on the hook for this loss. This coverage could respond when the milk truck cannot access your farm due to bad weather events, forcing you to dump your tanks.
Milk Contamination coverage can pick up the cost of contaminated milk on your farm, and the lost milk income for the other farmers you have impacted.
4. TENANTS LEGAL LIABILITY
Do you operate out of a rented barn? If you are renting space from another, you may be responsible for any damages if you are found to be negligent in causing a loss to the rented property. Tenants Legal Liability coverage provides an important safety net for renters in case they are responsible for damage to a landlord’s property.
It is important to insure your herd to full market value.
Your herd may vary in value per head, but as a whole – they represent a huge investment and would be expensive and time consuming to replace. There may be additional costs to replace your herd, such as emergency vet expenses, or perhaps the disposal of multiple carcasses which require special services to remove. Your insurance policy limits should be adequate to cover full replacement of your herd, and have provisions to cover these unforeseen extra expenses.
In addition to cattle that you own, there may be instances where livestock that you do not own are on your farm property. Maybe a friend is travelling to show their prized Holstein at a local fair and asks you to care for it until the fair. If you, or an employee of yours, is found to be negligent and causes damage to that cow, the dollar amount could be significant. Your insurance policy should have a sufficient limit to cover damages under these circumstances.
Produce is not necessarily limited to feed. Produce can also incorporate medication, bedding, stored milk, fertilizer, grain & seeds. You may not always know the exact time when you are going to sell your produce, so it is important to contemplate the maximum amount of produce that you could have at your farm at any given time. This will ensure that you have adequate coverage in case of a claim.
*Note: Each Farm/Persons requirements surrounding coverage for their farm should be discussed with a Licensed Insurance Agent or Broker, to obtain a full understanding of the product(s) coverage being provided along with possible limitations or exclusions of that coverage.