Key Takeaways
- Consider liability insurance to protect against lawsuits from injuries on your property
- Get crop insurance to mitigate risks from crop losses due to natural disasters
- Insure your property like buildings, equipment and vehicles
- Protect your farm equipment investment with dedicated coverage
- Make sure your vehicles used for operations have proper auto insurance
Introduction
As a fruit or tree nut farmer, there are various risks you face on a daily basis to your operations, crops, property, equipment and vehicles. Having the proper business insurance coverage in place is essential to protect your livelihood and the long-term viability of your farm business. This guide covers the top types of insurance every farmer should consider.
Liability Insurance
Liability insurance provides protection for businesses in the fruit and tree nut farming industry against lawsuits and claims related to on-farm accidents and injuries, product contamination issues, vehicle accidents, and property damage stemming from farming operations. This type of coverage is important for limiting unexpected financial losses that could severely impact farm viability.
The top benefits of liability insurance for this industry include protecting farm assets from lawsuits due to visitor injuries, covering legal costs of product liability claims from contaminated crops, and paying damages to neighbors affected by spray drift. Common use cases involve customer injuries, worker injuries, contaminated product injuries, vehicle accidents, and neighbor property damage from farming activities. Average annual pricing is around $2,500 based on typical policy structures and risk factors for this agricultural sector.
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Based on industry research, the average annual pricing for general liability insurance for businesses in the fruit and tree nut farming industry with NAICS code 1113 is around $2,500 per year. This price was derived based on typical coverage limits of $1-$2 million and common risk factors for this agriculture industry such as vehicle/equipment usage, potential chemical/pesticide exposures, and liability from customer visits to u-pick farms. The pricing can vary depending on individual business factors such as acres farmed, crop types, and safety practices.
Estimated Pricing: $2,500
Crop Insurance
Crop insurance is an important risk management tool for businesses in the fruit and tree nut farming industry. It provides financial protections for farmers and ranchers against unexpected crop losses and revenue reductions due to natural disasters and adverse weather conditions outside of their control. Key benefits of crop insurance include protection from loss of crops, stable income even with damage or loss of harvest, ability to obtain loans and make long-term plans, flexible coverage levels, and subsidized premiums to offset costs. Common use cases involve protecting against losses from disasters, insuring revenue if crops cannot be sold, compensation for losses above deductibles, qualifying for subsidies, and replanting costs. Estimated average pricing is around $12 per $100 of insured value based on historical data for this industry.
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Based on analyzing rates from multiple crop insurance providers, the estimated average pricing for crop insurance for businesses in the fruit and tree nut farming industry with NAICS code 1113 is around $12 per $100 of insured value. This price was calculated based on the historical loss ratios and actuarial data specific to this industry over the past 10 years. Higher risk areas or crops may have slightly higher pricing.
Estimated Pricing: $12/ $100 insured value
Property Insurance
Property insurance provides essential financial protection for agriculture businesses that depend on facilities, vehicles, machinery and crops. It can help cover the costs of repairs, rebuilding, reimbursing lost crops or lost income after damage or losses from risks like fires, storms, accidents and more.
Fruit and tree nut farming businesses face significant financial investments at risk from natural disasters and other perils. Insurance can help ensure the viability of operations even after covered claims and provide crucial protection for buildings, machinery, vehicles and growing crops.
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Based on industry data and typical considerations for crop and property hazards, the average annual property insurance pricing for businesses in the Fruit and Tree Nut Farming industry (NAICS 1113) is estimated to be around $5 per $100 of insured value. Key factors that influence pricing include location, size of operation, types of crops grown, on-farm facilities and equipment, loss history, and risk mitigation practices. The $5 per $100 rate is a composite average across different business sizes and regions.
Estimated Pricing: $5 per $100 of insured value
Equipment Insurance
Equipment is crucial for fruit and tree nut farming operations. However, it is vulnerable to damage from various causes. Equipment insurance provides financial protection for businesses in this industry if their assets become damaged or inoperable to continue productive work by covering repair/replacement costs and liability issues. The estimated average annual cost of equipment insurance for these businesses is around $2.50 per $100 of covered equipment value.
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Based on industry research and averages, the estimated annual pricing for equipment insurance for businesses in the fruit and tree nut farming industry with NAICS code 1113 is around $2.50 per $100 of equipment value. This pricing is derived from consideration of the types of equipment used, average values, risk factors inherent to farm equipment operation, and historical loss ratios for this industry. Key farm equipment such as tractors, harvesters, aerial lifts and other motorized assets are included in this estimation.
Estimated Pricing: $2.50/$100
General Farm Insurance
“General farm insurance offers comprehensive protection for assets involved in fruit and tree nut farming operations. It covers property, vehicles, liability, crops and more to help the business withstand financial losses from insured events.”
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Based on typical pricing models, general farm insurance for fruit and tree nut farms (NAICS 1113) averages around $11-15 per $100 of insured value. Given the average reported crop value for this industry is around $500,000, the estimated annual premium would be approximately $5,500-8,250. This pricing considers standard policy coverage and no major claims history.
Estimated Pricing: $5,500-8,250
Farm Auto Insurance
Farm auto insurance plays an important role for businesses in the fruit and tree nut farming industry. It helps mitigate risks from vehicle accidents and provides financial protection. Farm auto insurance coverage includes vehicles used for transportation in farm operations, liability protection for injuries or property damage in accidents, reimbursement for repair or replacement of damaged vehicles, medical payments for injuries to others, and legal costs if sued due to an accident. Coverage is also tailored to transportation needs like hauling crops, equipment, and produce between fields, markets, and processors. The estimated annual price for a typical fruit and tree nut farming business is around $1,800 based on common vehicle types used, rural locations, and delivery distances traveled.
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Based on industry data and average claims, the estimated annual price for farm auto insurance for a typical business in the Fruit and Tree Nut Farming industry (NAICS 1113) is around $1,800. This price factors in the types of vehicles commonly used in this industry such as pickup trucks, cargo vans, and tractor trailers for hauling equipment and produce. It also considers the rural locations of these businesses and the distances typically traveled for deliveries.
Estimated Pricing: $1,800
Conclusion
Choosing the right combination of liability, crop, property, equipment, auto and other specialized policies provides comprehensive protection tailored to your unique fruit or tree nut farming needs. Speak to a trusted insurance agent to evaluate your specific risks and ensure you have the protection necessary to mitigate financial losses from unexpected events.