Subject 8. Insurance, Records and Planning
In addition to the security measures presented so far, there are other steps you can take to protect your premises and family. How well you recover from a disastrous event, large or small, natural or man-made, can be an indicator of whether or not your ranch or farm has a future as a business.
In this section we will look at how records and adequate insurance serve as keys to a speedier recovery following a disaster. In addition, having an emergency plan that is well thought out and has been shared with your family and employees is critical to a strong recovery.
Review all insurance policies on an annual basis, or more often if significant changes are made in structures, livestock, crops, land, equipment, liability or when your business changes, such as starting a new enterprise. Remember that the purpose of insurance is not to fix everything, but to allow you to recover and not be ruined by difficult circumstances.
During your annual appointment with your insurance agent, review your policy to be sure it covers all assets and potential emergencies, such as theft, vandalism, pesticide spills, flooding, or terrorist attacks on your farm. Donʼt wait until you have a claim to find that your coverage is limited or nonexistent. For example, you need to know now what would happen if
Your policy may or may not cover all of the above circumstances, or it may cover some of them with exclusions. Some policies contain clauses that specify no coverage or reduced coverage under specific circumstances. For example, if you run an operation for which electricity is essential, your insurance company may require you to have generators in place to reduce damage during an extended power outage.
More about Insurance
During your appointment with your insurance agent, discuss specific descriptions, exclusions, and amendments. Be sure you understand your own responsibility to prevent or report a loss. Some policies state a specific time frame for reporting a loss, beyond which the insurance carrier is under no obligation to pay the claim. If you have high-value crops or animals, make sure that your policy covers them beyond fair market value. Ask if enhancing or installing security measures would lower your insurance premium.
Get everything in writing. There is no such thing as verbal confirmation. Insurance agents are human. They may misinterpret or misunderstand the way a company writes your policy, leaving you with inadequate coverage.
Be sure to promptly review all notices and amendments you receive from your insurance company. A premium increase is the most common change that your insurance company will make, but other changes might be subtle and even more crucial. For instance, your premium may remain the same, but a portion of your coverage may be decreased or canceled. Take time to read and understand your insurance information.