Do I really need specialist farm insurance?

Whether you own an arable, pastoral or mixed farm, you will need farm insurance to protect your livelihood and also for personal peace of mind.

Home insurance does not protect against the additional risks associated with owning a farm. Specialist farm insurance offers liability coverage, farm vehicle insurance, fire and theft coverage, property damage coverage and more.

Understanding the importance of farm insurance is a key first step to getting the right level of coverage. Farm insurance policies broadly cover three main categories:

• Buildings and equipment. You will need coverage for all the buildings and equipment that contribute to the running of your farm. These include tractors, harvesters, hay barns, and milking parlours. Most insurance policies will cover you against fire and flood damage as standard. However, examine your chosen policy with care to ensure that it covers you against all the eventualities that may threaten your livelihood, such as accidental release of pollutants, equipment breakdown or milk contamination.
• Livestock. Livestock may be your most valuable asset, so you must put the right coverage in place to protect it. You can choose between individual coverage for special high-value animals or a blanket coverage for the livestock.
• Liabilities. Consider getting liability coverage against claims made for accidents and injuries. If you employ labour, you will need insurance to cover workers' compensation in the event of being unable to pay wages.

Before approaching an insurer, do your homework and be clear about the level of coverage you require. If, for example, your livestock are of greater sentimental value than monetary value, you may choose to forfeit livestock coverage when purchasing your policy.

Comparing policies may seem like a chore but it could save you money in the long run. To compare quotes from insurers, you will need to provide information about:

• The nature and size of your farm
• The livestock you keep
• The crops you cultivate
• The number of outbuildings you own
• The equipment and machinery you use
• The forage you store
• The insurance claims you have made

A farm insurance policy could cost you hundreds of dollars a year, so shopping around for different options arms you with information for negotiating price. When requesting quotes, be careful not to overestimate the level of coverage you require, or you will end up paying more for your farm insurance. Similarly, do not underestimate, as you could lose out when you come to make a claim.

The longer you live on your farm, the more likely it is that you will need to review the coverage. If you purchase a new piece of machinery, it is up to you to update your policy. It can be easy to overlook the value of your farm, but taking stock of all your assets will ensure you always have peace of mind about your coverage.