As soon as you put up a new building, you need to insure it. That means your insurance agent needs to know all the details of every building on the farm, including what’s in it.
“Any time I write up a new policy for a farm, I ask endless questions,” says Jill Wiseman, a broker with Canada BrokerLink, a company that offers commercial and other insurance, including farm insurance.
When discussing outbuildings, she wants measurements, construction type, what sort of flooring it has, whether it’s heated and how, what it’s used for, who owns whatever is in the building, and whether it is for farm or personal use.
“Some people think I’m asking too much,” Wiseman says. “But I’m old school. I started out in claims, so I’ve seen how things can go wrong. I ask a lot of questions and talk about all the details with clients because I want to be clear about the sort of building and what’s in it, so I can get you the coverage you need.
“If you run any sort of a business out of your shop, I’ll ask about the business. An insurance policy may exclude certain businesses unless that use is specified. Each answer leads to another question. If it’s a storage building, do you store flammables? What’s the security? If it’s a barn, what sort of animals, how many and whose are they. If it’s horses, I’ll ask what sort of horses and how many stalls, who owns the horses, and is it a business, is tack stored and what’s its value?”
Wiseman also asks about the distance to other buildings. She likes to have photographs to get a sense of the building and its situation, and the other buildings on the property. Photos also help her avoid situations that might lead to conflict later.
“If the building is a chicken coop that’s 50 years old and ready to fall down, I’m not going to insure it,” says Wiseman.
Notify of changes
After a building is insured, likely as part of a policy for the whole farm business, you need to tell your insurance agent when there is any change to the building or the way you use it.
“The onus for accuracy is on both parties, the client and the agent,” says Wiseman. “So check your coverage every year and when you change anything and don’t hesitate to call and discuss details.”
You should tell the agent about any changes, such as storing fertilizer in a building that was used as cold storage for equipment when the policy was written. The other thing that affects coverage is ownership of whatever is in a building — personal items stored in a farm building may not be covered under the farm building policy, and farm equipment in the garage may not be covered under the homeowner’s insurance.
The agent also has an obligation to ask questions periodically. Wiseman does this annually, either by phone or letter, with suggestions or questions based on her knowledge of your operation. Appropriate questions are part of the Code of Conduct required of insurance agents by the Alberta Insurance Institute, which states agents are expected to advise clients on their needs.
All this questioning may make it seem like the agent is looking for ways to sell more insurance, but Wiseman says she respects a client’s right to self-insure. She just wants them to be aware of their options.
“If you have animals, I’ll ask if you want mortality coverage,” she says. “You might not be aware that such insurance is available or what the cost might be. And I always suggest at least $2 million for liability — it may be needed and it costs very little.”
Many also don’t know there is coverage for care, custody and control, which insures an owner against mishaps to other people’s animals at his or her farm. Wiseman recalls a farmer who rented pasture to a neighbour, but failed to warn about a hazard that the animals could encounter. There were losses and the owner of the animals, until then a friend, sued.