With over 40 years of experience in the insurance sector, Armagh-based broker Jim Burton is well placed to advise farmers on how to properly protect their assets.
“Everyone should have farm buildings cover, employers’ liability, and public and products liability cover. You can add in other things to suit your needs, but that’s a message that hasn’t changed down the years,” he said.
In terms of farm buildings, most farmers are now covered for both fire and storm damage, and with more extreme weather in recent years, there have been more claims related to weather events.
It is a factor in rising premiums when farmers go to renew policies.
“The key thing around farm buildings is to ensure that the valuation on the insurance policy reflects the cost of a rebuild, not the cost of building the sheds in the first place. If an assessor comes out and finds that the sheds are valued at £100,000, but it should have been £200,000, then they are only going to pay 50% of the claim,” said Jim.
The other factor pushing up insurance costs has been liability premiums, especially employers’ liability cover. “You need it, even if you only have casual labour, including a family member helping out on the farm. It only takes one claim, and it could cost you £100,000, so it is not a risk worth taking.”
When it comes to public and products liability, this is in place to cover a farmer against, for example, a member of the public suffering an injury while on their property (even if they had no permission to be there), or if livestock get out and cause a road traffic accident.
It should also cover dairy farmers who have been told to pay for the cost of disposal of a tanker of contaminated milk, although additional cover would have to be taken out if the farmer is to claim for their own lost income due to the incident.
“Essentially, you can take out insurance against nearly any eventuality, but everyone needs to assess their own risk. For example, some sheep farmer clients take out insurance against dog worrying, and some don’t, even though it is not that expensive,” said Jim.
He also pointed out that insurance companies are increasingly reluctant to take on clients who have let their public and employer liability cover lapse, so it is important to keep it up to date.
One area where a lot of farmers, especially in the Armagh and Tyrone area, did take out extra cover in recent years is related to livestock thefts. While the issue has died down in recent months, farmers in border areas are still potentially at higher risk.
Similar to when farmers are valuing buildings, it is important when valuing cattle or sheep against theft that farmers put a realistic value on the animals they hold, and work to the maximum number on the farm over the course of the year, said Jim.
“We know insurance is a significant bill for farm businesses, and if farmers covered everything it would cost them a fortune. We try to work with our clients, and of course, it pays people to price around,” added Jim.