Farmers branching out must ensure they're insured
According to government figures, 62 per cent of UK farmers are having to diversify alongside running a traditional working farm.
With lower food prices, increasing energy costs and the impact of Brexit yet to be felt, many farmers are finding new ways to make money. The great news is that nine out of ten schemes (94 per cent) have been financially successful.
More than half of England’s 57,000 farms have diversified in some form according to new figures released by Defra at the end of January 2019. The most common diversification was renewable energy (29 per cent), followed by property letting (15 per cent) and holiday lets (12 per cent). Other types of popular enterprises included livery stables (six per cent), outdoor leisure activities (five per cent), and farm shops (two per cent).
No one knows what life after Brexit will be like but one in five farmers believe they will need to diversify to remain sustainable if there are no direct subsidies. With this in mind it is important to remember that any new venture must be insured, so the first rule of thumb is to contact your insurance broker to discuss any changes or plans to move away from the usual farming activities on your land, or in buildings.
It really is very important that anyone who is diversifying their farming enterprise ensures they are properly insured from the outset. A new business brings with it new risks so having the correct cover is essential.
Do not forget that if you are planning a new project you must check with your broker if you need alternative or additional cover.
Insurance tips:
1) Keep insurer or broker informed of new activities/enterprises
2) Check public and product liability cover is adequate
3) Assess the implications any diversification may have on pollution/contamination. Environmental liability is an increasing problem
4) Be aware of the disease implications for livestock. Ensure you have the right biosecurity measures in place and make sure your disease cover is adequate, not just for loss but clean up too
5) Know what is in your building. Property may be let but you need to know what’s inside for adequate cover.
6) Always consider all risk: loss of income/revenue/profit/consequential loss
Keith Fowles is the owner of KLF Insurance Brokers.
