Farm and Ranch Coverage
Farms and ranches are
different than most other business operations because, 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 loss exposures that must be addressed.
One coverage method might
be to use commercial lines policies to handle the business needs and personal
lines (auto, home, recreational vehicle, etc.) policies to tackle the personal
needs. However this would be less than ideal. Such a combination of stand-alone
policies would be awkward and expensive. Further, the method would allow a
large number of coverage gaps and overlaps. It would easily create confusion as
well as coverage problems. 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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