Owning an insurance policy to cover unseen losses and future uncertainties is one of the most important financial decisions one can make. People revolve around health insurance, auto insurance, and home insurance because these are some of the areas that they hold dear. Despite the spirited campaign towards health insurance, the CDC indicates that there were more than 28.6 million individuals without a health insurance policy, which means that there is more work to be done in sensitizing the people about its importance.
Besides the increasing coverage for health, properties, and cars, there is need for agribusiness insurance, which is a policy that covers businesses that generate most of their revenues from agriculture-related projects. Agriculture is a vital industry in the world today as its role is to generate enough food for the ever-increasing human population.
Taking care of unseen risks and uncertainties is a necessity that needs to be reinforced. The energy shown in health and homeowners insurance needs to be replicated in the agricultural sector. Agribusiness insurance policy is reserved for commercial grain and field crop growers, wineries, bakeries, canneries, and cotton growers, among others.
What does agribusiness insurance cover?
1. Crop Failure
Farmers are always unsure of whether their crops will be a success due to external factors such as pests, diseases, and extreme weather conditions. In case of crop failure, farmers are indemnified through a policy that covers them against losses. However, the factors causing crop failure must be beyond farmers control for compensation to be effected.
2. Building Insurance
Buildings and related properties form a vital aspect of any agribusiness sector. If you run an agribusiness company, you know the worth of the buildings and how much the company has incurred to construct such properties. However, just like any other property, these buildings are under the risk of fire or anything else that may cause total collapse. Agribusiness insurance policy covers the properties within the premises to prevent total losses to the company.
3. Machinery Insurance
With increased mechanization in the agricultural sector, everything is handled by heavy machines. From the farm to processing warehouses, heavy machines and equipment keep the company running. Agribusiness insurance provides for unforeseen circumstances that could lender machines in the farm unreliable. As a fruit processor, you don’t want your equipment to run down. Extended downtime in your fruit processing farm is loss of money and time. Farmers insurance provides for repair or replacement of machines and equipment that have broken down.
4. Commercial Automobiles
Agribusiness companies have automobiles that ferry raw materials and finished goods from farm to the market. Just like any car, these automobiles experience breakage and fatal accidents. Automobile insurance is, therefore, an important factor in agribusiness. Most of the farms will not operate without these automobiles as they make work easier. They also play a vital of ferrying farm workers from the farms to their residential areas.
5. Workers Compensation
Thousands of workers work in various agricultural farms while others work in factories where raw materials are converted into finished goods. In such environments, accidents are bound to occur, and the agribusiness company is held liable. Agribusiness insurance helps in compensating workers. This insurance policy covers medical costs, thereby preventing the farm from court battles with its employees.
6. General Farm Liability
Just like any company, an agribusiness company is faced by hundreds of liability complaints arising from workers, business associates, and other stakeholders. It is important to highlight that a considerable number of agribusiness companies have closed down their operations after failing to handle their general liabilities. Good farm insurance plays a vital role in helping the farm to handle general liability claims.
Trends show that the world of agriculture is facing more risks and exposures than any other industry in the world. There are many external factors that are beyond the control of farmers and agribusiness owners. Therefore, if you run an agribusiness company, you will be on the safer side with an agribusiness insurance cover at hand.