What is loss of income insurance?
If you are a livestock farmer, you need to know about loss of income insurance. This can also be worded as extra expense & loss of income coverage or business interruption coverage.
Watch the short video to learn more or keep reading below.
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Farm Loss of Income Insurance
This coverage is normally added to your farm policy. It's called business interruption or farm loss of income, or you may see it as farm loss of income and extra expense coverage on your policy.
Type of Operations
It is mainly for livestock operations, whether that's dairy or beef cattle or confinement operations with poultry or hogs. It covers your financial protection if you had a barn burn down or a tornado come through. Or even just partial damage to your barn during a loss while it's getting rebuilt. Typically we'll see this in confinement barns; the #1 claim we see is barn fires that lead to several months of downtime with no revenue from that barn.
Whether you're a contract grower or you own your own hogs, this coverage is for you. If you own your livestock, you need to see how much coverage you would like during a loss or how much you could withstand losing. The more locations & barns that you have, the more you are naturally spreading your risk. This then becomes a personal choice if it is worth the cost of the insurance or not.
If you're a contract grower, you really need to dive into your contract with your integrator and see if you have a loss where your barn is not populated, are you going to lose revenue? I know a lot of times for turkey barns, even in your downtime while getting cleaned up you're not earning income. Most contract growers will not have income during the rebuilding stage. You need to look at the financials and determine if you can withstand three, four, or more months with no revenue from a barn.
Really just take a look at this, talk to your insurance professional, and determine if you have the coverage. Then decide the amount that you need to withstand a loss or maybe only insure certain barns depending on your operation.
If you enjoy this type of relationship with your insurance professional where it's based on education and insight, then please give us a call. We'd love to work with you.
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