765-395-7761
877-395-6200

Farms And Incidental Business


Other than agribusiness ventures, farms are unusual because smaller operations tend to face a mixed bag of loss exposures. Some exposures are common to businesses while others are exposures that are often faced by homeowners. This hybrid combination of exposures is due to the fact that smaller farms are usually run by families that also live on the farm premises. However, often only some of the family members are devoted full-time to their own farm’s operation.

As has always been the case, securing significant, steady income and profits from farming is very difficult. Therefore, the farm family may choose to supplement its main farm activity by operating other projects on their premises. Some may be related to their farming such as:

  • ·         Running a petting zoo area with some of the farm’s livestock
  • ·         Offering horse rides
  • ·         Operating a gift shop or produce stand
  • ·         Performing canning operations for other parties’ produce
  • ·         Operating a repair shop for small farm equipment

A farm may also involve other, non-farm projects, such as:

  • ·         Operating a daycare service
  • ·         Fee-assisted aid to other farmers on applying for grants and loans
  • ·         Operating a small accounting service
  • ·         Hosting a subscription newsletter service
  • ·         Operating a pottery studio in a converted farm barn

In most instances, the farm owner may be able to arrange for additional coverage to be added to the farm policy in order to handle losses connected to the given business operation. Typically, a precise description of the business such as: “Johnson Family Produce Cleaning and Canning Operation” is necessary. For an additional charge to the policy, the farm owner can be protected against loss to property that is used in the described business, such as a fire in a separate, converted barn that houses an accounting service run by the farmer’s spouse. It may also offer liability coverage. Consider the following:

Example: Sara “Granny” Smith owns a large apple orchard. She used to make cider and fruit juice manufacturing company. Since she still owns the building and equipment she used to make her own product, Sara begins a small operation (called “Granny’s Pressings”) to process the apples grown by several neighboring apple farmers. This "side juice from her own crop but she now has an agreement to sell all her apples to the region’s largest business" brings in about $7,000 a year, compared to the nearly $76,000 she takes in from selling her apple crop to the juice manufacturer. Sara’s cousin and insurance agent tells her that she won’t be covered for any damages resulting from “Granny’s Pressings” unless she adds additional coverage for this side-business. He convinces Sara by pointing out claim situations such as:

  • A neighbor who slips on apple remnants while carrying a bushel of apples onto Sara's property to be pressed into cider;
  • A child from a nearby town who becomes ill after drinking cider pressed at Granny's that was contaminated with oil used to lubricate the manufacturing machinery;
  • Sara packages a truckload of cider for a neighbor but the neighbor is unable to sell it to any stores because the inferior plastic bottles developed hairline cracks.

If you happen to run a farm that also contains other business activities, it’s important that you discuss the situation with your agent and find the best option for covering the additional source of loss.


COPYRIGHT: Insurance Publishing Plus, Inc. 2017

All rights reserved. Production or distribution, whether in whole or in part, in any form of media or language; and no matter what country, state or territory, is expressly forbidden without written consent of Insurance Publishing Plus, Inc.

Weather Insurance – Part One 


In general, weather insurance protects the sponsor of an event, a manufacturer of a product or a provider of a service that is heavily dependent on or is vulnerable to weather activity. It covers financial loss such as reduced revenue, increased expenses or inventory loss, as well as increased product promotion expense. A weather insurance policy is most useful for protection against the cancellation of, or reduced revenue from, events such as: 

·         Outdoor concerts 

·         Outdoor stage productions 

·         Fairs 

·         Farming 

·         Parades 

·         Carnivals 

·         Weddings 

·         Sporting events 

Weather insurance coverage can also be used as a marketing device. 

Example:?Acme Hardware has accumulated a large inventory of snow blowers. The store’s ad department develops a promotional campaign to boost sales. It guarantees partial refunds on snow blower purchases if snow accumulation from November 20th?through March 20th?is less than 60 inches. 

Weather insurance can also help to stabilize an entity’s cash flow. 

Example:?Painterville has experienced low snowfall for the last dozen winters. As a result, they have reduced the amount they annually budget for snow removal. Painterville’s council purchased snowfall insurance to protect it in the event they suffer a substantial increase in snowfall. Now, the town’s finances won’t be devastated by the need to increase the times that crews are sent out to remove snow and/or to treat icy roads. 

Rainfall Coverage

There are four basic types of coverage against excessive rainfall for any covered event: 

Cumulative Rainfall?- Example: A policy provides that, between the hours of 7:00 p.m. and 2:00 a.m. on August 15 and 16, 20XX, no more than 1/10 inch of rainfall will accumulate at the National Weather Service station based at the?Indianapolis?International?Airport. 

Consecutive Dry Hours?- A specific amount of rainfall that is not to occur each hour for a portion or for all hours of an event is insured. The rainfall amount is generally smaller than the cumulative rainfall coverage (1/100 or 2/100 inch of rain). This coverage is also known as Rain-free hours. 

Non-Consecutive Dry Hours?- A specific amount of rainfall that is not to occur each hour for a portion or all of the hours of the event is insured. The insured dry hours may occur at any time during the covered event. 

Extended Period?- This term is used when the coverage period is for more than one day. Extended period coverage is a combination of Cumulative Rainfall, Consecutive Dry Hours and Non-Consecutive Dry Hours coverage. 

Rain coverage is often combined with other weather conditions such as temperature. Please see part two for more information on weather insurance. 


COPYRIGHT: Insurance Publishing Plus, Inc. 2019 

All rights reserved. Production or distribution, whether in whole or in part, in any form of media or language; and no matter what country, state or territory, is expressly forbidden without written consent of Insurance Publishing Plus, Inc. 

Weather Insurance – Part Two


In part one, we briefly discussed that weather insurance is a method to protect event sponsors, manufacturers and service providers who are vulnerable to weather-sensitive losses. Weather-related insurance products protect against loss from excess rain, snow and temperature extremes. Besides forms that address rain-related loss, other types of similar coverage is available such as the following forms: 

Drought Insurance?– Protects against loss against seasonal or growing-season risk of extended dry spells that would threaten crops or grazing livestock. Coverage is usually based on a specified level of expected rainfall over a given period. 

Severe weather causing cancellation?- Provides coverage if some described weather condition occurs within a specific time and/or date. 

Example: Ciderburg’s Appledaze Fest is the small town’s largest source of income, but the three-day event is cancelled due to a prolonged stretch of violent storms. Fortunately, Ciderburg’s town council always buys weather coverage and their coffers are unaffected; even after the cost of the policy. 

Sky cover/sunshine?- Provides coverage if designated percentages of cloudiness or sunshine during specific times on a specific day or dates is not reached. 

Snow Insurance?- Provides coverage against any measurable amount of snow during a specified time period. 

Example: Polarville’s winter fest usually draws more than 30,000 to its events. A blizzard dumps nearly a foot of snow shortly after the fest begins and, as a result, less than 5,000 attend. Polarville’s Snowfall policy paid off for the heavy loss. The policy was written to pay in the event that more than 10 inches of snowfall occurred within any 24-hour period of the festival’s first two days. 

Temperature Coverage?- Insures against loss caused by maximum, minimum or average temperatures during specific hours, days or weeks. 

Wind Coverage?- It either covers against loss from higher or lower wind velocities compared to the average velocity over a three-hour period or against the fastest mile per hour wind speed. 

A Weather policy only covers loss of income or revenue from the specific event. It is intended to restore a party to the financial condition that would exist had no loss covered by the Weather insurance policy occurred. Is your event or business "under the weather”? It may be worthwhile to contact an insurance professional and discuss whether Weather insurance could make things better. 


COPYRIGHT: Insurance Publishing Plus, Inc. 2019 

All rights reserved. Production or distribution, whether in whole or in part, in any form of media or language; and no matter what country, state or territory, is expressly forbidden without written consent of Insurance Publishing Plus, Inc.