Farm insurance

Farming in Australia encompasses a unique mix of dangers, and depending on your location, Australian farmers may have to work in different situations, from unpredictable weather to machinery malfunctions.

• Weather: Extreme weather events such as bushfires, floods, droughts and storms may affect the farm business and damage crops.
• Injuries: Farmers face accidental injuries from their physically demanding jobs and public liability risks if someone gets injured on their farm or from their livestock.
• Theft and vandalism: Depending on the location and the security of the farm, farmers may be an easy target for thieves looking to steal machinery, livestock, fuel or farming tools.
• Machinery and equipment failures: Motor vehicles and electronic equipment such as tractors, irrigation systems and other essential farm equipment may break down unexpectedly, leading to expensive repairs/replacement costs and operation delays.

Building insurance for your farm buildings, such as barns, sheds, fencing and other infrastructure, can be a valuable safeguard against financial loss incurred because of fires, storms, damage from theft, vandalism and accidental damages. Contents insurance can also offer financial protection for items stored on your farm, such as machinery, equipment and livestock feeds.

Livestock insurance can give farmers peace of mind by offering reimbursement for animals they lose as a result of death or theft. Depending on the level of cover, it can also help cover any income lost if the livestock business is impacted by livestock loss.

The two main types of livestock insurance are mortality insurance, which pays for animal deaths from accidents, illness or disease, and specified perils cover, which protects against losses from specific events like fires, floods, predator attacks or theft.

Crop insurance is like a safety net for farmers when their crops are damaged by unpredictable weather events, pest infestations and other environmental factors. Crop insurance allows farmers to have income protection and ensure business continuity in the face of seasonal uncertainty.

Common types of crop insurance include:

• Hail insurance: Provides compensation for crop damage caused by hailstorms.
• Multi-Peril Crop Insurance (MPCI): Covers a broad range of risks, including drought, excessive rainfall, fire, frost and disease.

Farm liability insurance covers your financial liability for legal claims based on personal injury or property damage caused by your farm operations.

This insurance cover typically includes:

• Public liability insurance: Covers personal injuries to visitors, or other temporary guest on your property.
• Product liability insurance: Protects against claims related to your farm products that cause harm to consumers.
• Environmental liability insurance: Covers accidental pollution or contamination caused by your farming activities.

Farm vehicles and machinery such as tractors and irrigation systems are significant investments that require protection against breakdowns and damage.  Ensuring your farm machinery is covered can prevent costly disruptions to your daily operations.

Business interruption insurance limits this risk by compensating for lost income when farm operations are temporarily halted due to events such as fire or storm damage to critical infrastructure, machinery breakdowns or loss of livestock or crops resulting in revenue disruption.

Workers’ compensation insurance is mandatory in Australia for most businesses that have employees working on your farm. Workers’ compensation differs in different states but generally covers (depending on the circumstances):

• Medical expenses for farm-related injuries
• Lost wages due to work-related accidents
• Legal costs associated with workplace injury claims.

Having proper coverage ensures that even small-scale farm properties are financially secure. If your farm is not a commercial operation, hobby farm insurance protects your property, livestock and liability risks. Hobby farm insurance can be customised according to what you are looking for and can include the following:

• Property and buildings such as farmhouses, sheds and fencing
• Livestock and pets
• Public liability insurance to protect against legal claims from accidents on your property.

• Make a list of all farm assets, including buildings, equipment, livestock and vehicles.
• Identify potential risks based on location (e.g. fire-prone areas, flood zones).
• Decide on the sum insured you need to cover the risks and assets that you have identified.

• Look for policies that are tailored to cover your specific farming activities.
• Get a quote from different insurance companies, and consider the insurer’s reputation, claim process and customer support.
• Work with an insurance broker to help tailor a policy to meet your farm’s unique needs or look for competitive pricing online.
• If you own a commercial or enterprise farm, use a specialised insurer to ensure that you get the cover you need for your business.

• Check the underwriting in a policy for exclusions, such as specific weather events or animal diseases that may not be covered.
• Review your cover limits to ensure they match the value of your assets and that you’re fully covered for the risks and assets you have listed.