Farms and insurance – understanding the risk factors

• Every farm is different so it’s important to spend time understanding the specific risks
• Older homes can have a long history, so it’s important to convey the relevant information
• Farmstays and leisure activities have their own set of risks for farmers.

Farming is a complex business. No two farms are the same, and a ‘one size fits all’ approach to insurance simply won’t work, – which is why brokers and insurers need to work together to get the most appropriate cover for farming customers.

Understanding some of the most common risks found on farms will help ensure coverage and risk management plans are in place.

EPS in farm buildings

Expanded polystyrene (EPS) – polystyrene sheeting with aluminium sandwiching – is commonly used in construction. It’s also used internally for dividing up large spaces, or for insulating dairy farms or refrigerated units.

EPS can be highly flammable – so much so that firefighters will no longer enter a building containing EPS unless there is a threat to life.

Buildings containing EPS need to be carefully maintained and managed, with particular emphasis on fire hazard – from a stray cigarette to faulty wiring, the consequences could be catastrophic.

From an insurance perspective, well-maintained EPS risks can be writable, but there are several considerations that have to be taken into account, says Laura Nelson, Head of SME Digital Engagement at QBE. In most cases, the insurer will need to know the scale of EPS usage and the quality of the EPS. Other information, such as details from a recent thermal scan, is also useful.

“Anyone who remembers the scenes from the 2017 Grenfell Tower fire in London will understand the unpredictability of this cladding in the event of a fire,” says Nelson.

Insurance risks from horse riding on farms

The risks associated with horse riding on farms can be enormous, particularly considering the injuries that can be suffered, potentially leading to total or permanent disability, or worse.

A significant number of large liability claims on farms result from horse riding, particularly when inexperienced people are riding, or people are riding horses they aren’t familiar with.

If a farm is providing agistment services it’s important for an insurer to know how many horses are agisted, who might be riding those horses, and where the horses are being ridden. Of course, it’s also important to know if commercial riding lessons are being given on the property, as this will require a separate, specialised insurance policy.

Farmstays and leisure activity

For many farms, the leisure market holds increasing attractions. From a venue for a rural wedding to a weekend break destination, the property can offer a number of alternative income sources outside of the traditional.

“It’s important the insurer knows the full scale of activities that are occurring on the property in order to underwrite the risk,” says Nelson.

“There is a difference between farmers hosting people on an incidental and infrequent basis and running a business such as B&B accommodation, so it’s important to speak to the insurer to know what your customer will be covered for when they undertake these activities.”

Older home properties

Many farmhouses have a long history, and from an insurance perspective it’s important to convey the relevant information. For example, is it made of brick or timber? Tin roof or slate? When was it last rewired? Has it been replumbed? Is the property heritage listed?

“Also, it’s great to provide photographs to your insurer so we can see what it is we’re insuring,” says Nelson.

“We do use Google Maps photos, however the quality is a little variable, especially from regional areas, so being able to see for ourselves is incredibly helpful.”

Take the time to understand

Properly understanding your customers’ farm operations and risks will go a long way to ensuring they have the most appropriate insurance coverage. And with the right tailored cover in place your customers’ homes and businesses are protected.

QBE’s Farm Pack enables you to select the cover your customer needs – and work with QBE’s dedicated team to ensure everything that needs to be covered is covered.