Poultry farm insurance is one of the most important factors of running a successful poultry farm. Many times, poultry growers work with an insurance agent that is unfamiliar with the intricacies of the business which can cause confusion and unforeseen costs.
According to Insurance Specialist, Rusty Russell, who is licensed throughout the United States, some insurance policies lack coverage for true threats to a farm; these threats include ice and snow, loss of income coverage, theft coverage, and buildings and equipment replacement.
“A good rule of thumb with insurance is: if it’s not scheduled on the policy, it’s probably not covered,” said Russell.
Making sure you are covered for all situations that can affect your farm, and in turn your revenue, is critical to success.
Here is a list of insurance Live Oak recommends if you are interested in owning a poultry farm:
- Worker’s Compensation – Required if applicable. Limits are per state requirements.
- Employee Liability – Recommended if payroll is greater than $25,000.
- Liability (Required) – Liability insurance is critical in protecting yourself from any injuries and/or property damage that may occur on the farm. Liability coverage can help protect you against lawsuits by providing coverage for the farm. Liability coverage should be no less than $500,000; however, $1,000,000 in liability coverage is recommended to protect your assets.
- Replacement Cost (Required) – Coverage for houses, equipment and sheds should be on a replacement cost basis. Replacement cost is the appropriate amount of coverage to replace the equipment at the time of the loss, not including depreciation. Two of the most basic perils that a farm policy typically covers are fire and wind (unless wind is excluded in the policy). A “peril” is the specific cause of loss.
- Roof Collapse (due to snow or ice) (Required) – Coverage for this peril is usually available for buildings less than 10-15 years old. Sometimes coverage is indicated in the policy by the word “included,” or if the insurance coverage on each house is described as “special” or “broad.” Even if your policy or quote describes the coverage as “special” or “broad,” please check your policy for exclusions. If the insurance coverage on the chicken houses is described as “basic,” check with your insurance agent as this may indicate that Roof Collapse is not included in your policy.
- Equipment breakdown (Required) – Sometimes this coverage is known as “boiler and machinery” insurance. This coverage may pay for the cost to replace the damaged equipment as well as loss of business income when a covered breakdown causes a loss.
Russell urges poultry growers to remember there is a difference between Household Personal Property and Farm Personal Property. Items that are used on the farm, for the farming operation, such as backpack blowers, compressors, tools, ladders, power washers, etc. are not covered for loss under your typical Home Owner’s policy. They should be scheduled as Farm Personal Property.
“An insurance policy that has your poultry houses underinsured by $20,000 each, or that has gaps in coverage, or that doesn’t fully compensate your income because you lost 20,000 birds from a lightning strike, may indeed make you insurance poor,” said Russell.
View Live Oak’s New Grower’s Guide to learn more about the steps to becoming a successful poultry farmer.