Any business may suffer lost income and damage from adverse weather, but owners who rely on animals and open land could literally see their profits blown away by a tornado. Unfortunately, most standard insurance policies will not cover the types of losses suffered by farmers and livestock owners—and inadequate coverage can force family farms or even large-scale operations out of business. Attorney Bill Voss explores the tornado risks faced by agribusiness owners and the specialty insurance options that can help farmers and ranchers recover.
Your Farm Damage Policy May Not Cover All of Your Tornado Losses
After the debris has been cleared, farmers, ranchers, and dairy farmers will need to work quickly to protect their remaining stock and calculate the amount of their losses. While many commercial insurers offer agribusiness policies, these basic policies may not be extensive enough to cover all business operations, leaving owners out-of-pocket for a large portion of the damage.
If you are a commercial grower or packer, ranch owner, dairy farmer, or head of a family farm, you should carefully consider the add-ons and extensions available to enhance your coverage, such as:
- Property damage extensions. Farmers who live onsite can include their dwellings in a commercial policy and may choose replacement coverage for a dwelling with a value of over $1M. Depending on coverage limits, owners can be reimbursed for the loss of private structures, household furnishings, and personal property, as well as the increased cost of building code upgrades and temporary living expenses during repairs.
- Pollutant clean-up. Pollution protection can pay for the costs of cleaning up a widespread spill of fertilizers or dangerous chemicals, and can replace any stock lost as a result of a spill on the owner’s property.
- Commercial auto coverage. Comprehensive commercial auto insurance protects business vehicles from all perils, including weather damage—and this coverage may be extended to plows, tractors, mowers, excavators, harvesters, and other high-value drivable farm equipment.
- Lost electronics and equipment. Equipment breakdown can cover the loss of a farm computer, point of sale, automated milking machines, and other specialized electrical equipment.
- Utility coverage. Utility interruption coverage can pay for power interruption losses, such as alarm system malfunction causing theft, refrigeration failure resulting in spoilage, or animals wandering offsite due to downed electric fences.
- Specialty stock losses. Vineyard growers with attached wineries or dairies with commercial ice cream and cheese shops onsite may need additional protection from product contamination and spoilage.
- Animal coverage. Specialized coverages may be available to protect livestock, but also horses and domestic animals needed to perform work on the farm. Enhanced coverage may also include property damage to stables, pens, fences, and corrals.
- Crop and feed losses. Tornados can rip the tops from silos, level whole fields of green crops, and destroy harvested products waiting to be shipped. Insurance can be extended to cover products such as hay, grass, and corn in storage and in transit, as well as the cost of replanting.
- Seasonal insurance. A tornado can cause a smaller seasonal yield on cash crops, livestock, and other products, sinking the farm’s overall profits. Seasonal insurance coverage can make up the difference in sales, keeping the business afloat even when a tornado causes a “bad year.”
- Loss of farm income. It can take weeks or even months to rebuild and reestablish normal operations after a tornado causes widespread damage. Business interruption coverage can replace lost profits for up to six months after a tornado, helping owners supplement their income during renovation and restoration.
If you are having trouble getting your insurance company to cover all of your tornado losses, we can help. The attorneys at the Voss Law Firm can read through your policy carefully and negotiate with the insurer on your behalf, getting you the maximum amount of coverage you are owed. Simply fill out the form on this page today to learn more about your options, or order a free copy of our book, Commercial Property Owners Must Read This BEFORE Filing an Insurance Claim.