FARMERS are being warned to make sure they have sufficient sums insured within their farm policies to cover for replacement input costs, given the continued substantial increase in fertiliser prices globally.
Acres Insurance Brokers is advising farmers to check their policies, highlighting the benefits of covering replacement input costs under crop business interruption insurance.
“Fertiliser prices have been going stratospheric,” says Nigel Wellings, director and insurance broker with Acres.
“I have had clients that have seen costs more than double, paying around £280 per tonne for ammonium nitrate orders back in June and July, while today the equivalent is approaching £700. However, very few farmers will have stopped to consider the insurance implications of this huge hike,” he explains.
On many more traditional farm insurance policies, fertiliser will be insured against fire, vandalism or theft, as part of produce and deadstock on the farm insurance policy. Produce and deadstock insurance requires the farmer to set the sum insured at the correct value to replace the produce or product, such as fertiliser in this example.
“For growers that have already had fertiliser delivered, or are expecting to take delivery, they need to ensure the produce and deadstock sum insured is drastically increased to ensure they have full coverage for the replacement value,” says Mr Wellings.
If not, Mr Wellings says that in the event of a claim, they will be under-insured, and insurers will only pay out a percentage of the replacement value.
The farm insurance policies sold by Acres Insurance Brokers automatically includes cover for the replacement cost of all inputs, under crop business interruption insurance.
“This means that as long as your total crop value is correctly insured, the replacement cost of all fertilisers and agrochemicals is automatically insured, with no need to increase values. This is a major advantage of this type of Insurance cover in the current rising fertiliser market,” says Mr Wellings.
As independent brokers, the Acres team helps ensure farmers don’t miss potential gaps in their farm policies, through experiencing brokers and handlers with a hands-on knowledge of farming.