Farm insurance: what it covers and who carries it
A packaged policy for a farming business covering property, machinery, liability and sometimes livestock and crop.
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In short
- A farm pack bundles property, machinery, liability and sometimes livestock and crop sections for a farming business.
- The farm is a home, a workplace and a business at once, which is why the packaged form exists.
- Livestock and crop cover are usually narrower than farmers expect.
Farm insurance is packaged because a farming business does not divide neatly into commercial and domestic. The house, the sheds, the machinery, the fences and the stock are one operation, and a single policy is how that is usually handled.
The sections inside vary more between insurers than in almost any other pack.
Also called: farm insurance, farm pack, rural insurance
What is usually inside
Farm property covers the dwelling, sheds and fixed improvements. Farm machinery covers tractors and harvesters on a specified basis. Liability covers injury and damage arising from farming activities, including stock straying onto roads.
Livestock and crop sections are commonly limited to named perils rather than covering loss generally.
- Dwelling, sheds and fixed improvements
- Farm machinery and mobile plant
- Liability arising from farming activities
- Livestock and crop, usually on named perils
- Fences, water and hay in some wordings
What the liability section has to reach
Farms carry exposures other businesses do not: livestock on public roads, chemical drift onto a neighbour, visitors and contractors on site, and agritourism where the public is invited in.
Diversifying into farm stays, cellar doors or contracting for neighbours changes the risk described on the schedule, and the policy follows the description.
What people get wrong about it
The first error is assuming livestock are covered for death generally, when cover is usually limited to specified events such as fire or accident.
The second is not updating machinery values, since specified-item cover pays against the schedule rather than against what the machine is worth.
The third is not telling the insurer about contracting done for neighbours, which is a business activity the farm policy may not contemplate.
Questions
- Are my livestock covered if they die?
- Usually only for specified events such as fire, accident or transit, rather than for death generally. The named perils on the schedule are the boundary.
- Does the farm policy cover contracting I do for neighbours?
- Not necessarily. Contracting for others is a business activity in its own right, and whether it falls inside the farm policy depends on how the business is described. It is worth settling before the season rather than after an incident.
Occupations that commonly carry it
Ordered by how central this cover is to each occupation in the graph. A pattern in the data, not a statement that any business is required to hold it.
- Farmers — Primary production of crops and livestock, with plant, property and liability exposures.
- Agricultural contractors — Contract farm work such as sowing, baling and cultivation using own machinery.
- Shearing contractors — Contract shearing and wool handling, supplying teams to properties.
- Irrigation contractors — Design and installation of irrigation systems for farms and grounds.
- Spray contractors — Licensed application of agricultural chemicals, by ground rig and aerially.
- Harvest contractors — Contract harvesting with headers and haulage during a narrow seasonal window.
- Viticulturists — Vineyard operation and management, with crop, plant and visitor exposures.
Sources
- Moneysmart (ASIC) — General guidance on business insurance from the regulator’s consumer site. A starting point, not a definition of this cover.