Farm Insurance in Washington
A standard homeowners’ policy may cover some hobby activities that are not conducted at a profit. However, some insurers maintain that once sales of a product occur, then a farm insurance policy is necessary.
Identify all Operations
One of the biggest mistakes made by farm owners is failing to identify all operations that will take place on the farm or planning in advance for operations. Below are examples of some farm operations:
- Will crops be grown?
- Will livestock be raised?
- Will products from the farm be sold directly to the public?
- Will employees work on the farm?
- Will equipment be used?
- Will children or visitors visit the farm?
- Will animals be boarded for others?
- Will equipment be leased?
- Will land be rented?
- Will buildings be used in farm operations?
The Farm Policy
The standard farm policy is a hybrid of homeowners coverage, commercial business insurance and specialty insurance coverages:
- Property Enhancements: can be added by endorsements. These endorsements broaden coverage and increase the internal limits on certain property which are built into the policy.
- Liability Coverage-This coverage will cover a loss unintentionally caused by you or your employees to another’s property or person.
- Medical Payments-This coverage will provide payments for medical bills sustained by someone injured on your property.
- Additional Living Expenses-If you must relocate from your home due to damage caused by a covered event, then this coverage provides for the costs of things like temporary housing or a hotel stay.
The basic coverage can be modified by endorsements. Some endorsements will add to the cost of the basic policy. Some endorsements that are worth considering:
- Replacement Cost Coverage – will pay on a loss at the replacement cost instead of the actual cash value.
- Property enhancements – can be added by endorsements these endorsements broaden coverage in bundles of coverage.
- Laws and ordinance coverage – will cover the cost of bringing a house or outbuilding up to code after a loss. For example, if the barn is damaged, then typically the barn will need to come up to modern code during the repair. That extra cost is typically not covered but can be added by endorsement.
- Boarded Animals Coverage – can be added both as a property endorsement and liability endorsement. Under a standard policy neither liability or property damage is covered if the loss is caused by or to a boarded animal.
- Water Damage/Sewer Damage Coverage – can add protection for sewer or water backups to the home or outbuildings.
- Livestock Insurance – This coverage is written to cover “livestock” for certain specified perils. “Livestock” is defined as cattle, sheep, swine, goats, horses, mules, and donkeys, and a “loss” is defined as the death or destruction of the livestock. This form, available on a stand-alone basis, is a good option for a tenant farmer who has no agricultural real property such as farm houses and barns.
These are just a few of the more important endorsements – talk to your insurance professional and fit the basic farm policy to your needs.