Coverage Options That Can Save Farms and Orchards After a Fire

From wildfires to lightning strikes, fires are a constant threat to Texas businesses. Unfortunately, businesses that rely on healthy crops or keep most of their stock outdoors can suffer millions in losses in a matter of minutes—and their insurance coverage may not be enough to carry them to the next year. Attorney Bill Voss takes a look at special fire risks for agribusinesses, as well as essential coverage options that can protect against bankruptcy.

Assessing the Damage After a Fire on a Farm or Orchard

Unfortunately, it can be difficult to tell just how much damage has been done to a living plant immediately after a fire. In many cases, owners will simply have to wait and see if damaged plants are able to recover, making their insurance claims even more complicated. It may be necessary to hire experts to examine the plant’s root systems and cambium layers of damaged trees to estimate how many plants are likely to survive.

Growers should carefully examine their fire insurance policies to ensure coverage for all types of losses, including:

• Planted and picked crops. Insurers often differentiate between coverage for fruit still on the tree and fruit that has been picked and packed for shipment. In addition, all crops grown on the property should be listed (not just primary field and row crops).
• Seeds and grain. Feed, grain, and seed are typically only covered by farm insurance while stored. If you are growing feed crops, these will need a policy extension.
• Repair and replanting. Damaged crops may be able to be saved with a little extra care, such as fertilization, fungicide, and additional irrigation. A policy extension may provide the extra funds growers need to restore acres of damaged plants. 
• Specialized equipment. Growers and owners should ensure that all of their farming equipment is specifically covered in their property damage policy, including tractors, chainsaws, irrigation systems, planters, and insect and bird deterrent systems. Anything that is not automatically covered should be listed on a policy endorsement.
• Farm dwellings. There are many special considerations for dwellings covered under a commercial policy. Firstly, if a farmhouse serves as the family home, owners may want to purchase additional coverage limits as well as an amount to cover hotel and costs after a fire. If the dwelling is a historic property, the policy may need to be extended to cover matching costs to repair the structure with “like” materials. Finally, the loss of business income should be considered if the home is rented out or used an events space (such as for weddings or corporate events).
• Barns and other structures. Many different structures may be lost when a fire sweeps across an open area, including barns, cider mills, gazebos, garages, picnic areas, and other outbuildings. Owners should ensure that all structures are listed in the fire policy, especially those that are used to host events that can result in lost seasonal income.
• Refrigeration losses. Orchards may rely on cider sales and baked goods to bring in sales in the autumn, and loss of power can mean spoilage of a year’s worth of work. A policy extension may cover any inventory in freezers and refrigerators due to fire damage or mechanical failure, as well as pay to replace the damaged refrigeration units.
• Business income. Business interruption insurance provides up to six months of payment to farmers, owners, and growers who suffered a significant adverse event. Growers may also opt for extra expense coverage, which can be used to pay for machine rentals, fuel costs, and other expenses that would otherwise be paid for out of pocket.
• Seasonal protection. Seasonal insurance can be invaluable to growers and farmers, as it allows income replacement for a “bad year.” If the fire caused the loss of a major cash crop, seasonal insurance could provide payment until the next harvest.

If you are having trouble getting an insurer to cover the costs of a fire, we can examine your policy and get you the full amount you are owed. Simply fill out the form on this page today to contact the Voss Law Firm or order a free copy of our book, Commercial Property Owners Must Read This BEFORE Filing an Insurance Claim.