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Managing volatility and reducing risk - protecting your farm business in 2023

While 2022 saw many headlines across the year, from drought to jubilee, the loss of a monarch to the various world cups, the underlying current throughout that time was inflation and volatile pricing. With both of these trends set to continue into 2023 and be met with additional recessionary headwinds, it’s important to risk-manage your farm business and take stock. Oliver Burns, from County Insurance Services, explains more below.

As insurance brokers, we are often posed the question “Am I covered for…” and then follows a typical scenario on farm, either a theft of flood usually. More recently, though, conversations have been centred around the cost of rebuilding and replacing farm or business units and homes. Many clients have also asked about lead in times for replacing machinery, spare parts, vehicles and even necessities such as fuel and fertiliser.

While traditional insurance can help protect the farm from unforeseen events, inflation is much trickier to risk manage. There are, however, new ways of being able to stop or at least soften it’s effect:

  • Get a valuation on farm buildings to help give you peace of mind. With prices starting from £162 inc VAT for upto 5 buildings at one site, it is very affordable to help understand your position. You can then discuss with your insurance provider about inflationary provisions in rebuild values within policies. Without that valuation, however, those provisions or cover provided on a “Day One” basis will not function.

  • When looking at Business Interruption with your insurance advisor, discuss if 12 months really is long enough for your to recover following a loss. If you rely on a piece of machinery or your livestock life-cycle is more than 18 months then you need to consider increasing your indemnity period. Also taking into account delays in rebuilding works themselves and availability of specialist contractors, 24 months or more may be adequate.

  • Liability and Legal Expenses limits traditionally have been set at £10million and £250,000 respectively. If your looking to employ more people, or you are heavily diversified and have many visitors to your farm or business, then you might need to consider increasing these limits.

  • While we often talk about key men or personal accident in the business, do you take out private medical insurance? With waiting times for routine operations exceeding 12 months in some cases, often a premium spent on this can help you or your workforce back to work quicker and save the business money.

To find out more about how County Insurance can help you please contact Oliver on 01865 290916

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