The high prices of pedigree livestock mean they are expensive to replace if they are stolen or die in an accident, and in many cases, general insurance is insufficient to cover the loss.
Insuring pedigree animals has become a very specialist business thanks to the high value of the livestock. However, many farmers don’t realise exactly what their insurance covers and whether their policies will be enough to replace like-with-like in the event of problems.
“Pedigree livestock insurance can be a complex business, but it’s vital to ensure you have the right policy to cover your animals, and importantly, you know exactly what it covers,” said Carol Rickerby from Carlisle-based H&H Insurance Brokers.
She is heading up the new in-Livestock division of the agricultural insurer, which has been launched to meet demand from customers seeking specialist advice and policies to protect their valuable investments.
Initially concentrating on pedigree cattle and sheep, in-Livestock is backed by a team of underwriting staff with expertise in the sector, and the decades of experience of parent group Harrison and Hetherington, which operates seven livestock auction marts in Northern England and the Scottish Borders. The specialist division is able to provide cover for breeders at key breed society auctions and insure private sales of top quality animals.
Carol said: “The nature of different breeders’ and farmers’ businesses means that there is no one-size-fits-all cover, and it’s important to organise a bespoke policy to protect your valuable animals.
“With pedigree animals, it’s all about their reproductive performance, so insurance covering the conditions of sale if the animal fails to fulfil can be just as important as policies for death by accident, illness or disease.”
She advises pedigree breeders and keepers to find out exactly what their current policies cover and then check whether they are adequate. Under a Farm Combined Policy, animals are covered as standard for death or damage by Fire, Lightning, Aircraft, Explosion, Earthquake, Impact, Electrocution, Theft, Fatal Injury, Transit & Worrying. However, not all policies automatically cover unexplained losses, such as when a cow wanders into a wood and its body is not recovered, or a sheep is swept into a watercourse by flooding.
Carol said: “Policies for fatal injury generally just cover incidents away from your premises but if you have pedigree stock, this isn’t sufficient. You can extend your policy to insure for fatal injury on your own land, such as snow bringing down a building’s roof, and to cover worrying by vermin such as foxes in addition to dogs.”
By taking out a Specified Livestock Policy, both breeders and buyers of valuable animals are covered for additional aspects that Combined Farm Policies generally do not specify. Infertility in a pedigree animal is an important aspect to cover, and this is generally known as Vendors Guarantee insurance. Such policies can also cover All Risks of Mortality and Loss of Use, which provide payments if a pedigree animals dies due to an accident , illness or disease, or cannot work after an accident.
“For pedigree cattle and sheep, a Specified Disease Policy is also a useful insurance to have,” said Carol.
“This covers keepers for losses due to TB, Brucellosis and Foot & Mouth and will pay out a set amount, usually 25%, of the ministry compensation. It provides vital financial help if a pedigree business is wiped out by disease.”
One of the major issues pedigree livestock breeders and keepers face with a Combined Farm Policy is that many have a single animal limit – typically £5,000 or £10,000 – which can be inadequate for a pedigree herd.
Carol added: “We are also seeing issues with how people work out the overall value of their livestock. A common mistake is to assume that as beasts are not all housed in the same shed, then the sum insured should only represent the maximum amount in any one shed or at any one location. As underwriters take this into account when assessing the risk, the sum insured should represent the maximum value of the stock in a 12 month period.
“Also, it’s important to look at your policy’s terms for reporting times if you are insured for veterinary fees. Most will have strict claims terms such as reporting within a set time and appointing a vet at the earliest opportunity. A vet’s certificate and a valuation will also need provided in supporting evidence of the claim.”
Business Interruption Insurance is often part and parcel of Combined policies for dairy farmers, in case milk production stops due to a disaster such as a fire. Again, if you have pedigree animals, it may be worth taking out a separate policy, and also looking at the length of time the insurance will cover you for a business interruption.
Carol said: “Many farmers only insure for 12 months but it is strongly recommended to take out a minimum of 24 months to adequately protect the business from a large loss.
“As these policies only operate following specified perils, care should be taken that all contingencies required are taken. Disease covers are not available under this type of policy and should be insured separately if required.
“Finally don’t forget working dogs as these can be costly to replace. They can be covered either for specified perils under a farm combined policy or for all risks of mortality under a separate policy.”
For more informational about the specialist cover offered by in-Livestock, please go to www.in-Livestock.co.uk or contact Carol Rickerby on 01228406290 or 07703672337.