The Co-operators currently offer OFA members exclusive coverage and savings on insurance plans. OFA has collaborated with The Co-operators to release more in-depth information on dealing with Limits of Property Insurance, Limits of Liability Insurance, and Loss of Income.
Limits of Property Insurance
Due to the challenges and fractures within multiple supply chains it has never been more important for Farmers to review that the limits of insurance for their structures, their animals, their machinery are sufficient to replace at the substantially increased costs of goods today. It is not unusual to see increases in costs for replacement of a piece of farm machinery in the range of 20% – 30%. Lumber prices have driven the cost to replace structures, primarily frame ones, up at least 30%. Due to these increased costs, farmers could find themselves in a situation where their total insurance coverage falls short of the amount of money that would be needed to replace damaged property. OFA would encourage farmers to check the limits of their property insurance to ensure they still have adequate coverage.
Limits of Liability Insurance
As farmland continues to become less and less available, its price continues to increase. The overall net worth of a farm and its owners, partners, and inhabitants should be considered when placing liability limits. Within the province of Ontario, it is recommended that all farms actively engaged in the pursuit of agricultural enterprises carry a limit of $5,000,000 and consider higher limits where the need exists. Understanding exactly how much liability insurance each farm operation requires is a complex process that takes many variables into account such as the value of the operation and the primary commodities being produced. OFA would strongly encourage members to get in touch with their insurance advisor to ensure they have sufficient liability coverage.
** Completing a proper review of your operations is essential for ensuring that your operation is understood and protected in the event of a liability claim. Contract your insurance professional for a comprehensive review.
Loss of Income/Loss of Use Endorsements
Catastrophic loss is never planned for. It occurs when we least expect it. As a livestock intensive operation (poultry, dairy, hog) there is a substantial gap in many Loss of Income (also known as Business Interruption) coverages in the Ontario marketplace. Please review with your provider to ensure that your limit and your period of indemnification allow you and your family the financial stability to continue to do what you love. Business interruption insurance is a type of commercial property insurance that protects against income loss as a direct result of loss, damage, or destruction to insured property. Farmers without any type of business interruption insurance, could find themselves in a situation where they are without income when farm assets are damaged or destroyed. Business interruption insurance can help bridge the gap and maintain cashflow in certain situations. Farmers are encouraged to check if they have business interruption insurance, if the level of benefits they would receive are adequate and the length of time for which benefits are payable under there current policy.
** For Cash Crop operations – please ensure that the limits for loss of use of a combine, swather or other harvest type machinery ensure that a viable replacement can be obtained for the most pivotal time of your season.