Key Takeaways
- General liability insurance protects against claims from injuries on your property or caused by your operations
- Property insurance reimburses costs to repair or replace damaged buildings, equipment and covers lost income during interruptions
- Crop insurance provides financial protection against losses from natural disasters or poor yields
- Equipment insurance covers repairs, replacement or loss of highly valuable farm machinery
- Business interruption insurance replaces lost profits if operations are disrupted by events like weather or equipment failures
Introduction
As a business involved in soil preparation, planting or cultivating, it is important to protect your operations and assets from unexpected financial losses. The top types of business insurance to consider include general liability, property, crop, equipment and other specialized coverage relevant for agricultural operations.
General Liability Insurance
General liability insurance provides essential financial protection for soil preparation, planting and cultivating businesses from risks associated with their agricultural operations such as injuries on client properties, equipment accidents and product liability claims. It covers risks like accidents that occur on client properties while working, injuries from equipment use, transportation accidents, and product liability claims if contaminated materials are accidentally spread. The average annual cost for general liability insurance for businesses in this industry is approximately $2,500 based on insurance provider data.
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Based on analyzing data from multiple insurance providers for businesses in the soil preparation, planting and cultivating industry (NAICS Code: 115112), the estimated average annual pricing for general liability insurance is $2,500. This pricing takes into account factors like business size, annual revenue, number of employees as well as the higher risk nature of this agricultural industry.
Estimated Pricing: $2,500
Property Insurance
Property insurance is an important risk management tool for businesses in the soil preparation, planting and cultivating industry. It provides coverage for physical assets like equipment, buildings, crops and inventory that are essential to operations. The top benefits of property insurance for these businesses include covering repair or replacement costs if assets are damaged, reimbursing lost income during interruptions, and insuring liability risks. Common use cases where property insurance provides protection involve equipment, buildings and structures, crops in the field, and on-site inventory. The estimated average annual cost for property insurance for businesses in this industry is around $1,500, though various operation-specific factors can influence the final pricing.
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Based on research, the estimated average annual pricing for property insurance for businesses in the soil preparation, planting, and cultivating industry (NAICS Code 115112) is around $1,500. This price is derived based on typical property values and risks for farm operations of this type. Factors like acreage, location, types of crops grown, and safety practices influence the final pricing.
Estimated Pricing: $1,500
Crop Insurance
Crop insurance is a crucial risk management tool for farming businesses that depend on crop yields for their livelihood. It provides financial protection against unexpected losses from natural disasters, poor crop production, and revenue declines outside of a farmer’s control. Crop insurance for farms and operations in the soil preparation, planting, and cultivating industry (NAICS 115112) offers key benefits such as coverage for losses from events like drought, flood, hail, and disease. It also allows access to operating loans and credit needed to continue farming operations each new season. Estimated average annual premiums for crop insurance covering 100-300 acres of farmland in this industry are around $15,000.
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Based on average crop insurance pricing for operations involved in soil preparation, planting, and cultivating, the estimated average annual premium would be around $15,000. This was calculated based on averaging premiums for several mid-sized farms and operations in this industry that plant a variety of annual crops like vegetables across 100-300 acres of farmland.
Estimated Pricing: $15,000
Equipment Insurance
Equipment like tractors, harvesters, tillers and other machinery are essential assets for businesses in the soil preparation and cultivation industry. However, this equipment represents a major financial investment that requires insurance protection against unexpected repair costs from accidents, damage, theft or liability claims. Key benefits of equipment insurance include protecting against costly repairs or replacement if damaged, providing financial security if lost or stolen, and covering liability if rented equipment causes harm. Equipment insurance is commonly used to insure against physical damage, theft, liability and mechanical breakdown. Estimated annual pricing ranges from $8,000-$12,000 on average depending on insured values, age of equipment, loss history and other risk factors.
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Based on industry averages, equipment insurance for businesses in NAICS 115112 (Soil Preparation, Planting, and Cultivating) would be approximately $8,000-$12,000 annually. Pricing is dependent on total insured equipment value (typically replacement costs are used), age and condition of equipment, loss history, and other business-specific risk factors. Equipment in this industry includes tractors, harvesters, planters, cultivators and other machinery. The average total insured equipment value for mid-size farms and businesses in this industry is around $500,000.
Estimated Pricing: $10,000
Business Interruption Insurance
Business interruption insurance protects against losses in revenue and additional costs that businesses may incur as a result of events outside of their control disrupting normal operations. It is especially important for businesses involved in soil preparation, planting and cultivating as their ability to operate seasonal farms and equipment can be impacted by adverse weather, fires, equipment failures or pandemics through no fault of their own.
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Based on research of average premiums for businesses in the soil preparation industry, business interruption insurance for a typical business in this category would be priced at approximately $2.50 – $3.50 per $100 of gross profits. This price range was derived by analyzing historical loss data for soil preparation businesses, their typical revenue levels, and property values at risk. The mid-range price of $3 per $100 of gross profits was selected as the estimated average pricing.
Estimated Pricing: $3 per $100 of gross profits
Workers’ Compensation Insurance
Workers’ compensation insurance is a critical protection for businesses in industries like soil preparation, planting, and cultivating due to the physically demanding nature of the work and exposure to risks. It provides medical, lost wage, and disability benefits to injured employees while protecting the business from costly lawsuits. Common injuries for this industry include muscle strains, lacerations, burns, fractures, heat exhaustion, and more due to hazards like dangerous machinery, chemicals, heavy lifting, repetitive motions, and working outdoors. The estimated average annual cost for workers’ compensation insurance is around $2.50 per $100 of payroll.
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After reviewing industry data on injuries, claims, and premiums paid for the Soil Preparation, Planting, and Cultivating industry (NAICS 115112), the estimated average annual pricing for workers’ compensation insurance would be around $2.50 per $100 of payroll. This price was derived based on the industry having a high injury risk due to the physical labor involved, but not being in the highest risk categories. The injuries tend to be minor but frequent, such as muscle strains and minor cuts. Using a payroll of $500,000 as an example, the estimated annual premium would be $12,500.
Estimated Pricing: $2.50 per $100 of payroll
Conclusion
Implementing the right mix of business insurance tailored to your risks can help ensure financial stability even during difficult seasons. Consult with an agricultural insurance specialist to understand your unique needs and implement a risk management strategy providing essential downside protection.