Farm and
Ranch Coverage
Farms and
ranches differ from other business operations since, at least with small to
medium operations, the owner both conducts his business and lives with his
entire family on the same premises. Therefore, a farm or ranch has a combination
of commercial and personal losses to be properly insured.
One coverage
method might be to use commercial policies to handle the business needs and
personal (auto, home, recreational vehicle, etc.) policies to tackle the
personal needs. However, such a combination of policies would be awkward and
expensive. Further, the method would allow a large number of coverage gaps and
overlaps. A much better approach would be to use a product that satisfies all
potential coverage needs in a single policy.
The differences
among various farm and ranch operations certainly complicate the task of
finding proper coverage. Successful farmers and ranchers tend to be
specialists, yet are flexible in order to run efficient operations.
Fortunately, farms and ranches have a number of elements that are common to all
operations, so products have been developed for this challenging market.
One standard
farm program uses a cafeteria approach to offer coverage. The owner of a farm
or ranch operation may choose to have only Farm Property and Farm Inland Marine
Forms to address the property coverages, but use the Commercial General
Liability Forms for the liability coverage exposures. They may choose to use
the Farm Umbrella or a Commercial Umbrella with a Farm Endorsement. A Homeowners
policy may be used on the dwelling but a Farm property coverage form on
everything else.
Options are an
important feature of a good farm program. The following, basic coverages are
widely available:
·
The Farm Property Policy - covers farm-related buildings
(residence, barns, sheds, silos, etc.)
·
The Farm Inland Marine Policy - covers farm-related machinery and
equipment
·
The Farm Liability Policy - protects against damage or injury
caused by farming/ranching activities
·
The Farm Umbrella Policy - provides a higher level of liability
protection
·
The Farm Combination Policy- offers a way to bundle stand-alone
farm/ranch coverages into a single package
The more
flexibility offered by a program, the greater the chance that an insurance
professional can assist a farmer or rancher with developing an effective
insurance plan.
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2011
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