What You Need to Know About Hobby Farm Insurance

December 13, 2018

Farming is a major part of human existence. It is because of farming that we have food on our plates. However, not every farmer is farming as their primary occupation. Many of us engage in farming as a side business or a hobby.

For those with just enough acreage, hobby farming can make for a great lifestyle and provide you and your family with a great deal of enjoyment. But just because you’re doing it as a hobby doesn’t mean that it doesn’t come with some risks. It can be easy to assume that a hobby farm is just that – a hobby.

However, it often requires the use of equipment and animals, which creates an environment of unpredictability. This makes insurance a must.

The exact type of coverage will vary based on the kind of farming activity you engage in. For instance, some hobby farmers may be covered under a homeowner’s insurance policy. But, if the farm is big enough and your activities are a little more complex, you might need a very different insurance solution.

The Difference Between Hobby Farm Insurance and Standard Farm Insurance

Hobby farm insurance varies from standard farm insurance in that hobby farms are often small-scale establishments run for pleasure rather than profit. So, you need an insurance solution that focuses on this aspect and is right-sized for non-commercial operations.

There are a wide range of insurance solutions that suit a specific size of farmland or the kind of work done on the farm. Let’s take a look at some.

For starters, you have “Buildings and Contents” cover, where the tenanted dwellings or owner-occupied dwellings are covered against theft, fire, and water damage.

Then, there’s options for “Other Farm Buildings,” where structures such as grain silos, sheds, and workshops are typically included.

You can also have “Farm Liability Insurance,” designed to cover you against liabilities related to third party damage or personal injury caused by your hobby farm activities.

Similarly, you have “Farm Machinery and Motor Vehicles” insurance, where the machinery and vehicles used on your hobby farm are covered.

Finally, you have “Farm Fencing Insurance” and “Business Interruption Insurance.” Your farm fencing can be covered against damages caused as the result of extreme weather or natural disaster. Business interruption can insure you for additional cost such as agistment where you suffer a loss caused as a result of property damage.

These can be tailored and packaged to suit the unique needs of your hobby farm.

In Conclusion…

Hobby farm insurance is important to make sure you have the peace of mind to continue to enjoy your hobby. We can help you talk through your situation and recommend a right-sized insurance solution to help manage your hobby farm risk. Why not give us a call or stop in the branch today on (08) 9301 0562

The Strawberry Scare: Understanding Contaminated Product Insurance

September 20, 2018

According to this article from the ABC, police have been investigating four separate reports of needles being found in strawberry punnets in the homes of West Australians. This is a scary series of events for all of us (and thankfully, at least at the time of writing, no one has been injured), but it’s also a major concern for the businesses associated with this issue. A WA-based grower — Mal’s Black Label strawberries based in Gingin, 70km north of Perth — had earlier been drawn into the crisis when two of their punnets were found containing needles in supermarkets in South Australia. We thought it might be timely to discuss the insurance safety net that is designed to protect businesses and help them recover from an event such as this: Contaminated Product Insurance.

What is Contaminated Product Insurance?

Contaminated Product Insurance (CPI) can help manage the effects of a recall, covering key expenses and even PR consultants to guide the critical first weeks of a recall. CPI, according to information from AIG Australia, can cover events such as:

Accidental contamination (likely the opposite of what we’re seeing with the strawberry situation)
Adverse publicity – which is the reporting of either an actual or an alleged accidental OR malicious product tampering (more likely to be the case with the strawberries) where the insured product has been named
Intentionally impaired ingredients – this covers intentional and wrongful but not malicious contaminations or impairments – these occur as a result of a third party-supplied ingredient
Malicious product tampering – also likely to be a factor with the strawberries as it includes malicious alteration of an insured product
Product extortion – a threat to commit malicious product tampering that’s communicated to the insured party to demand money, property or services
Government recall – an official recall order to comply with food safety regulations

What kind of businesses could benefit from Contaminated Product Insurance?

The typical types of businesses involved would be manufacturers, distributors, suppliers, importers, wholesalers and retailers of products that are applied or ingested (such as food, beverage, beauty and pharmaceuticals.

Your insurance broker and the insurer will consider a number of factors to put together a CPI solution, including the industry and product type, turnover, number of production plants and lines, claims history, risk mitigation, quality control and business continuity/recall plans.

Find out more about Product Contamination Insurance

If you want to discuss your unique business needs, or for a free quote, contact Regional Insurance Professionals.

The importance of insurance: The safety net protecting your future and your family!

August 28, 2018

The importance of insurance

Let’s face it, life is full of risk. Risk when you start a business, risk when you buy a home, risk when you travel overseas. But does it stop you making decisions about the way you choose to live your life? Does it prevent you from taking a step forward in your life because of what may go wrong? Insurance is designed to help us keep living the lives we want with the intention of minimizing your risk, live without fear! Live without ‘what if’ … what if we get sick travelling? What if we get a house fire? What if our business gets robbed?

Insurance alleviates the worry and ‘what if’ about travelling overseas or starting a new business, when you have insurance that’s your safety net to going ‘all in’ with your life. Without business insurance for example your whole life’s work could potentially come to nothing if you don’t protect your asset.

The real purpose of insurance

Regional Insurance Professional’s David Cahill says “It’s imperative that we stress the importance of insurance to families. I think the real purpose of insurance gets lost sometimes and seen as just an expense. People forget the impact on their business and therefore their family if they don’t have cover or the correct cover.”

“I like to think of insurance like a community rainy day fund or charity that we all contribute to, to take care of individuals in time of need. The purpose of insurance gets a little bit lost by people as they concentrate on the expense of the ‘grudge’ purchase and not the underpinning of their lives, both health-wise and financially. I’ve seen first hand that the stress of having insufficient insurance cover, or worse, no cover at all, and I can tell you it’s far worse than the stress of budgeting for the protection of your business and your family.

“Now, we’ve been in the insurance industry for over 20 years and in that time served thousands of clients. Of course, not everyone suffers the ill fate of getting struck by a tragedy of an event, but I can assure you those of my clients who have found themselves in a bad situation have not regretted investing in insurance.”

Why get insurance?

Top motivations for our clients getting insurance are:

Protect your family
Protect yourself and your work and or home
Minimise risk
Peace of mind
Ability to re-build your home or business in the event of an extraordinary event

Insurance shouldn’t be seen as an expense but as a safety net that allows you to live risk free and re-build yourself if and when you need to.

Like most policies it’s a good idea to do a health check on your policies once every 12 months (or any time there’s a change in your situation) to make sure you’re getting what you need in the event an extraordinary situation were to occur.

Contact us if you’d like to talk about your specific situation or to get a free quote and make sure that you’ve got a rigorous and competitive solution in place.

Are you doing all you can to protect your farm and your family?

May 29, 2018

As a farmer you understand risk management and how to throw hundreds of thousands of dollars out in the paddock and get it back.

However it only takes one bad year.

Farmers regularly say things like “looking at the figures over the last X years only once would Multi-Peril Crop Insurance have been beneficial.”

That’s like saying we don’t insure the $500,000 header because only once in the last X years have we had a bit of a fire where it would have been beneficial.

Don’t gamble it – protect the future of your farm and your family

Unless you can predict the future and changing weather patterns, can you afford to self-insure now when finally there is a product to give you financial backup?

If you have half a million dollars in the bank to self-insure that loss then that’s probably okay.

Don’t be fooled into thinking that self insuring doesn’t have a cost… Just one bad year can take hundreds of thousands of dollars out of your pocket and destroy your farm business.

Remember if you have to go the bank to borrow money, you pay the bank’s risk premium in their interest charges.

Also the conservatism that results from self-insuring has an opportunity cost. It restricts growth decisions such as forward selling a greater percentage of grain when prices are high, taking opportunities to expand with leasing more land or purchasing a new property or investing more in the crop when prices are up.

According to Mark Twain, ‘farming is simply gambling with dirt’ but that doesn’t have to mean you’re gambling with your farm and your family’s future.

Increasing awareness and mitigating mental health risk factors for farmers

Depression and anxiety are being talked about more and more in the farming community, with too many suicides as a result of financial pressures (in fact, the risk of suicide is significantly higher for male Australian farmers than the general population or non-farming males). Multi-Peril Income Protection goes some way to reducing these financial pressures.

When we are stressed and anxious it clouds our thinking, having protection to cover the worst case can allow you to make logical decisions. This article from the ABC demonstrates the risk and concern around mental health for WA farmers during a bleak harvest outlook or financial pressures.

If you or someone you know is at risk please reach out to Lifeline.

Farmers helping farmers

People often forget what insurance is. Insurance is the pooling of money that is then used to assist those that need it.

The farming community is generally very generous providing hay and grain where and when it is needed to assist those in drought. Insurance does some of that automatically and more effectively. Insurance companies manage that pool of money and spread the risk over insurers locally and around the world.

Many people have come together to create this product for Multi-Peril Income Protection with backing through Lloyd’s of London to give farmers a way to spread the risk and allow them to compete with farmers the world over who already have access to similar products.

Don’t just survive. Thrive!

Farmers are used to being conservative when making decisions as already discussed but this product allows farmers to lift the eyes and see what could be. It helps protect family’s finances and health in what is a difficult industry.

As a broker for the professional farmer, we recommend this product. We suggest at least getting a quote for Multi-Peril Income Protection and talking through your specific situation – it costs you nothing but could result in a lot of peace of mind.

General Advice Warning

Please note: The information provided in this article is only general in nature – before making business decisions you should consider seeking advice specific to your situation.

What’s the commotion about business interruption insurance?

October 9, 2017

In a recent blog post, Professor Allan Manning found in his and insurers’ research that 84% of SME business owners believe they are fully insured, while only 2% of Australian SME businesses are fully protected with business interruption insurance.

There is clearly a disconnect between what people believe they have, to what they really need, when it comes to a claim. This is across most classes of insurance but arguably none more so than business interruption insurance.

Furthermore, around half of all SMEs that have an insurable loss fail within two years as a result of inadequate cover.

What is business interruption insurance?

Business interruption insurance covers the shortfall in gross profits caused by the interruption to a business from insured events, helps pay ongoing costs and protects profit margins until the business is back on its feet and back at its profit level before the interruption.

Would your business survive a prolonged interruption?

Our insurer partner, CGU, published its findings from a recent survey of nearly 500 small businesses, which found that one in four would not survive if they had to close their doors for three months.

Perhaps the most striking finding was that 1 in 7 businesses experienced a shortfall in income because of a business interruption in the past 12 months.

What can business interruption insurance cover?

Business interruption insurance can help keep you afloat while you wait for plans to be drawn up or council permits to be approved when rebuilding. It can also cover the costs of finding and fitting new premises, advertising to let your customers know you have moved and when you’re fully open for business again. Proper protection can ensure you are able to continue to pay and retain key staff while the business gets back on its feet. It can also cover interruption costs to your business, even if the damage is to another business you don’t own, such as suppliers not supplying, key customers unable to purchase your goods or when power or gas outages limit your ability to do business.

Do I need cyber insurance for my business?

October 9, 2017

Many SME businesses could be at risk of losing money and customers because they don’t have cyber insurance or a cyber security plan, according to this AAP article published by SBS.

Only 13% of small businesses have a plan to protect their money and valuable client data, according to a monthly survey of 400 small business owners by online business management solutions provider MYOB Group.

All types and sizes of business may be susceptible to cyber attack, but attackers may consider smaller businesses more vulnerable because they are unlikely to be as well prepared as larger enterprises.

What are the most common types of cyber attacks?

Cyber attacks can involve individuals in a business being tricked into clicking on a download, email or attachment that may contain a virus or ransomware. If the attack is successful your business may be blackmailed, threatened or held to ransom. Should you pay this kind of ransom to get your business back up and running? According to this Huffpost article, no, not unless someone’s life is in danger, as there’s no guarantee the hackers will keep up their end of the bargain, and it only serves to further reinforce their behaviour.

A cyber attack may also involve a false invoice being sent to a business and money being paid to a fraudulent party.

The Australian Cybercrime Online Reporting Network (ACORN) received nearly 12,000 reports of cyber crime in the quarter leading up to June 2017, 51% of which related to scams or fraud and 19% to purchases or sales.

Last week the Australian government’s StaySmartOnline service, which provides information on how home internet users and small businesses can protect themselves from cyber security threats, warned of scam emails under the guise of “E-toll Account statement” or “AusPost Delivery”.

These scam emails invited email users to click on a “View in OneDrive” link which could lead to the installation of malware onto the user’s computer.

Earlier in September, a fake email circulated claiming to be an invoice for an eBay purchase, and another email claiming to be “Voice Message from 017234512978 – name unavailable” aimed to download ransomware onto the user’s computer.

Cyber attackers are typically after money already in a business’s bank account or looking to divert money that should be flowing into that account. Also, cyber attackers seek client information which can be used in identity fraud.

According to the Privacy Act, businesses that turn over more than $3 million a year are obliged to protect information and if you’ve taken no measures to protect your business and your customers, you may be liable for prosecution.

Also, clients who have personal information stolen may have a case to take legal action against the business that was attacked.

What can you do to protect your business from cyber attack?

Clearly cyber attacks have some big downsides. But remember that prevention is truly the best medicine. Risk mitigation is really about doing the basics (but ACTUALLY doing them – how many of us are guilty of having a favourite password for everything?!)

Complex, difficult to guess passwords, keeping off public wifi, ensuring your antivirus protection is up to date… most of us are aware of the common sense steps to manage our cyber risks, but we need to set aside time to ensure we’re maintaining a good basic level of hygiene. Despite that, your business could still be impacted by a cyber attack, and that’s where cyber insurance can come into play as your safety net.

Talk to us about what a right-size cyber insurance solution could look like for your business.

Bushfire warning – get ready for an early and active season

September 22, 2017

According to the Bushfire and Natural Hazards Cooperative Research Centre report, this year we have high fire risk forecasted for parts of WA amid the driest autumn in five years.

High bushfire risk for parts of Western Australia

Record rainfall last summer has contributed to large quantities of perennial grassland (fire fuel), combined with drying conditions as summer approaches.

The areas most at risk include the South West and western parts of the Great Southern regions, the Goldfields Midlands and parts of the Pilbara and north Midwest Gascoyne.

Fire authorities are calling for people to prepare their homes and update their bushfire activation plan immediately.

We’ve already seen instances of fires cropping up in WA, such as this one in Kununurra – don’t procrastinate your bushfire planning.

Bushfire activation plans should include an insurance review

That plan should include a review of your insurance solution – do you have any new machinery, extensions or renovations since the last time you reviewed your insurances with your broker? It doesn’t cost anything but time to make sure you’ve got that peace of mind, and it could save you heartache and money in the long run.

Look out for each other during high bushfire risk

In a Perth Now article, Deputy Commissioner Lloyd Bailey, of the Department of Fire and Emergency Services, said WA communities had known the heartbreak caused by bushfires and warned the seasonal outlook made it likely to happen again.

“Everyone needs to play their part. Prepare your home and property whether you plan to stay and defend or leave; write down your plan; ensure friends and family are aware of your intentions; share your plan with neighbours; pay attention to environmental signs and look out for each other,” he said.