Something we’re often asked with regards to the farm owner/sharemilker relationship, is who’s responsible for insuring what.
Traditionally, the insurance needs for owners, contractors and sharemilkers are the same: domestic contents, farm contents (especially milk), implements, farm vehicles, business interruption and liability. Farm owners have the added responsibility of insuring their farm buildings, irrigators and employee housing.
Your contract should be reflected in your insurance policy
Ultimately, it comes down to what your contract says, but in most cases there are going to be a lot of shared risks, particularly in the liability and business interruption space.
Maintaining business continuity is one of the biggest things that keeps farmers up at night. Unfortunately, it’s often around claim time when they realise there were gaps in their cover, because their contract wasn’t reflected in their insurance policy.
Issues with dealing with multiple insurers
We also see a lot of duplication and farmers being over-insured or paying premiums for things they didn’t necessarily need to, because different insurers have varying levels of cover within their policies.
Working with the same insurer is one of the best ways of avoiding this, and we’re seeing more and more clients refer their contract or sharemilkers to us for this reason.
It also makes a difference at claims time too. There is a lot less friction working with one person (who already knows you), rather than dealing with multiple agents.
A sharemilking client had a worker who accidently hit a Pivot Irrigator. The farm owner had this insured with another provider and due to the difference in policy response; there was a significant difference in how the claim was settled. There was also confusion between the farm owner and the sharemilker as to how this was to be insured. All the while, the business was out an irrigator leading up to peak season.
We’ve found that when your sharemilker or contractor also has their insurance with FMG, any claims that arise on the farm can be sorted so much faster. This means everyone can get back to business with as little hassle as possible.