Posted May 18, 2017 by Administrator
Raising livestock and poultry is a risky business. That is why farmers need adequate insurance to cover their animals from unexpected events. Farmers have a variety of options available to them when it comes to farm animal insurance. They can opt for customized coverage for the specific types of animals they raise or combine several different policies.
Fundamentals of Livestock Insurance
Farmers can often combine their livestock coverage into their overall farm package. This way, they can have adequate protection for their buildings, livestock, and poultry in the event of a death due to accident or injury. Some policies cover animal deaths due to illness as well, but this is specialized coverage.
Farmers can use the following methods to insure their animals:
- Herd Coverage: This is the most basic and common coverage. Farmers use this type of insurance to cover a precise number of animals.
- Blanket Coverage: This type of policy insures all farm property. It includes buildings, livestock, equipment, and so on.
- Individual Coverage: This policy covers animals with higher worth. The policy explicitly states which animals are covered. The corresponding animals often have an identifying feature such as an ear tag.
Farmers can also purchase insurance unique to their livestock. Some examples include:
- Cattle insurance
- Pig insurance
- Poultry insurance
Farm insurance packages often cover animals such as sheep and goats, so farmers do not need specific policies for these animals.
Farmers invest a lot of time and money into their animals. For many farmers, their livestock is their livelihood so they cannot afford to neglect insurance. To learn more about insuring livestock, contact the experts at Cline Wood.
This document is not intended to be taken as advice regarding any individual situation and should not be relied upon as such. Marsh & McLennan Agency LLC shall have no obligation to update this publication and shall have no liability to you or any other party arising out of this publication or any matter contained herein. Any statements concerning actuarial, tax, accounting or legal matters are based solely on our experience as consultants and are not to be relied upon as actuarial, accounting, tax or legal advice, for which you should consult your own professional advisors. Any modeling analytics or projections are subject to inherent uncertainty and the analysis could be materially affective if any underlying assumptions, conditions, information or factors are inaccurate or incomplete or should change.
Posted March 1, 2016 by Administrator
All businesses look for ways to save money, including agribusinesses. If you are looking to cut costs in 2016 you may be looking at reducing your crop insurance coverage. However, the money you save on insurance premiums may not make up for the money you lose later if you have a tough year.
Agriculture Act Not A Safety Net
One reason you may be looking at cutting your crop insurance is because of the Agriculture Risk Coverage-county average (ARC-County). ARC-County was created as part of the 2014 Agriculture Act to help protect agribusinesses who had below average crop yields. Many farmers and others in the agriculture industry believe that with this safety net in place, crop insurance isn’t necessary.
That isn’t the case. ARC-County offers limited protection and figures are based on lower levels as part of the county average. Because farm yields are variable, the coverage received from ARC-County wouldn’t be enough to offset losses for most agribusinesses.
In a recent study comparing ARC-County with different types of policies and coverage levels, agribusinesses would need ARC-County and crop insurance to help offset loses. And since 2016 is expected to be a tough year for crop yields, you may want to consider keeping the crop insurance coverage you have.
There are other ways for agribusiness to reduce costs and maintain adequate coverage. Contact us today and our experts can help protect your business and your bottom line.
Posted August 25, 2015 by Administrator
Agribusiness plays a crucial role in the health, safety, and security of our nation. Our economy depends upon the products we grow, how and where we ship them, and the ongoing success of the businesses that do so. As such, safety, regulatory compliance, science and technology, medical and cultural and shifts, and a host of other factors can significantly impact the health of the agribusiness sector. The Cline Wood agribusiness blog brings interesting and relevant content to those who work in or with the agribusiness community in a concise and professional format. Check out our top 6 posts from recent months to learn more:
- Farmers Encouraged to Speak to the Public about the Long-Term Effects of a Gluten-Free Diet
- Understanding Crop Insurance Tax Deferment
- 3 Ways Agribusiness Owners Can Lower Their Insurance Premiums
- Stay Informed on Animal Health and Food Safety Regulations
- The Future of America May Lie at the Intersection of Fuel and Food Production
- Energy and Natural Resource Companies Need Strong Risk Management Strategies
Posted July 28, 2015 by Administrator
Insurance agencies often offer credits for lower insurance premiums based on specific factors, such as driving records, worker’s compensation history and recorded training programs. Here are the top tips for saving money on insurance costs for agribusiness insurance costs:
- Increase your deductible
When you raise your deductible to the highest amount you are comfortable handling, it lowers your monthly premium.
Depending on the type of buildings you have, you may be able to reduce your premium by electing to go with an actual cash settlement as opposed to a replacement cost settlement. You may also be allowed to exclude coverage on buildings that you would not elect to rebuild in event of a major loss.
You can apply these principles to motor vehicles as well. You may elect to not have physical damage coverage on some or all of your vehicles in order to save money on monthly premiums.
- Put safety first
Setting up a well-documented safety program is a great way to ensure insurance savings. Create a culture of safety by being organized, keeping your facility neat and orderly, and making sure all required regulations (such as fire extinguishers) are installed and maintained. Make sure all employees are wearing goggles and gloves when working with anhydrous. Ensure all employees know and follow all safety policies and procedures.
One strategy for ensuring a culture of safety is to appoint someone to be the “safety coordinator.” This helps to keep everyone accountable and ensures quality control checks are kept up-to-date.
Another strategy is to investigate all accidents to find out what caused the accident and what could be done to prevent future incidences. Building a safety culture can result in lowered insurance premiums.
- Be Diligent about Prevention Measures
Insuring a feed and grain facility is not like insuring an office building. Unlike barns or other agriculture buildings, an office building has a much lower risk of dangers such as fire or explosions. There are a lot of hazards in an agricultural setting than many other types of work environments. Regularly conducting facility maintenance, maintaining regular sanitation routines and keeping things organized and put away where they belong can go a long way toward reducing the risk of fire or other disasters.
Installing preventative measures such as heat warning devices, spark detectors and flame suppressants will help to reduce the fire risk. Bundling wires together, keeping floors and working areas tidy, replacing bad belts and bearings are examples of ways regular maintenance and upkeep can lead to lower insurance premiums by reducing accidents that my cause harm to your employees and the facility.
Posted July 14, 2015 by Administrator
There have been significant drought conditions in certain parts of the country in the last few years, producing the need for clarification on crop insurance and tax regulations. In general, crop insurance proceeds are taxed in the year of receipt. A crop insurance beneficiary can elect to defer the tax liability until the following year. So in most cases the beneficiary will pay the taxes on the insurance payout in the year the payout is received, but a one-time election could be taken allowing the payment to be deferred until the following tax year.
There are, however, conditions that must be met in order for the beneficiary to be eligible for the one-time deferment.
- The insurance proceeds must have been received in the year the crop was produced.
- The majority of the taxpayer’s crop sold in the year following the year of production.
- The taxpayer must be using the cash method of accounting.
The tax deferment is an “all or nothing” type of election. For example, if the taxpayer received $50,000 in crop insurance related to production issues and $10,000 related to price issues, the $10,000 related to price issues must be paid in the year of receipt. The taxpayer could elect to defer the $50,000 if the above conditions are met, but must defer the entire amount.
May crop insurance products provide coverage for multiple types of qualifying conditions, such as poor production and low prices. If the beneficiary receives a payout for multiple coverage conditions they will need a breakdown of the benefit payout that specifies the amount for each condition. The taxpayer should retain the information in case the IRS requests it.
Please consult your tax advisor for more information about tax rules as they apply to agriculture insurance. Cline Wood Agency is a leading provider of agribusiness products. We would love to speak with you if you have any questions about agriculture-related insurance. Contact us through our website or call us at 888-451-3900.
Posted March 13, 2015 by Administrator
Livestock auctions present a crucial opportunity for agribusiness transactions to take place. Yet the unique risks involved make traditional business coverages woefully inadequate. Cline Wood understands these challenges, and offers a range of products specifically tailored to this purpose. This includes:
- Convenient Pay Plans
- 48 Hour Turnaround on Livestock Claims
- Property & Casualty Programs
- Specifically Tailored Livestock Coverage
- Payment Insurance Available
To learn more, discuss your livestock auction exposures with us today.
Posted February 19, 2015 by Administrator
Grain and feed dealers comprise a crucial segment of the agribusiness industry. Protecting business operations and assets presents a significant challenge due to the unique needs of companies in this area. As a dealer, do you know your risk exposures? Do you know your coverages? Insufficient coverage can crush a business when accidents or natural disasters occur. Yet excessive coverage can prove equally detrimental to your bottom line. Areas of potential risk exposure include:
- Tank Leakage
- Environmental Impairment
- Keytrol Cards
- Chemical Drift
- Trucks and Automobiles
In addition to protective coverages for goods and facilities, liability coverages are numerous and imperative. From D&O to EPLI, it’s crucial to understand your coverage needs and outlay. To learn more, contact us.
Posted January 29, 2015 by Administrator
Agribusiness represents this country’s largest industry, and protecting your assets, production, and liability in an effective and cost-effective manner can prove challenging. But failing to obtain coverage can spell ruin for your business and have a significant impact on the customers you serve. Understanding which risk exposures you face and how to best protect your agribusiness is our business. We represent top agribusiness insurance carriers across the country with access to all types of insurance programs including but not limited to:
- Livestock Auction Markets
- Feedlots-Commercial Operations
- Hog Confinement Operations-Commercial Operations
- Feed Milling & Blending
- Fertilizer Mixing & Blending
- Country Elevators
- Seed Dealers
- Feed, Grain & Hay Dealers
- Fertilizer Dealers & Storage – with or without application
- Growers & Shippers
- Dairy Operations
- Milk Haulers