Key Takeaways
- General liability insurance protects the business from lawsuits if someone gets injured on the property or claims damage from farm operations.
- Crop insurance provides financial protection against risks outside of a farmer’s control like weather events, diseases and pests that could damage noncitrus fruit crops.
- Property insurance covers costs if buildings, equipment or stored crops are damaged by disasters like fires, storms or flooding.
- Workers’ compensation insurance covers medical costs and lost wages if employees are injured on the job while working at fruit farms.
- Business interruption insurance protects income if operations are disrupted due to property damage, equipment issues or events affecting crop yields.
- Umbrella insurance provides additional liability protection above basic policies for risks not fully covered.
Introduction
Businesses that grow noncitrus fruit crops like berries, nuts and melons face risks that could financially impact their operations. Having the proper types of commercial insurance is crucial to help protect these fruit farming businesses. Some of the most important insurance policies to consider include general liability, crop, property, workers’ compensation, business interruption and umbrella coverage.
General Liability Insurance
General liability insurance provides essential coverage for businesses like fruit farms to protect against expensive lawsuits. It can help ensure the financial stability of the farm even after unexpected injuries, property damage claims or other legal issues that arise from operations.
Some key benefits of general liability insurance for fruit farms are that it covers legal fees if the farm is sued for accidental injuries on the property, protects from lawsuits if a visitor is hurt during u-pick or an event, and covers claims if farm operations like spraying damage a neighbor’s property. It also insures independent contractors and employees if injured on the job. Having adequate liability limits in place protects the business assets if it faces a major lawsuit.
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Based on industry data and analysis, the estimated average annual pricing for general liability insurance for businesses in the Other Noncitrus Fruit Farming industry with NAICS code 111339 is $1,500. This price was derived by looking at insurance rates for similar agricultural industries of comparable sizes and revenues. Factors like payroll, number of employees, acreage, and types of activities were also considered in determining this estimated average price.
Estimated Pricing: $1,500
Crop Insurance
Crop insurance offers important protection and support for farms growing other noncitrus fruit crops like berries, nuts, and melons against risks outside of their control. It can help provide stability and peace of mind to focus on operations by offering coverage for multiple perils in a single policy. Crop insurance also provides crucial financial assistance to help farms recover from losses and rebuild their operations after insured disasters. Furthermore, it gives farmers access to loans and credit from lenders, supporting their long-term viability.
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Based on historical yield and loss data for other noncitrus fruit crops such as berries, nuts, and melons in the United States, the average pricing for crop insurance would be around $10-15 per 100 dollars of coverage. This price range takes into account average yields, risks of loss from weather events and pests/diseases, and typical coverage levels purchased by farms in this industry. The final price for an individual business would depend on the specific crops grown, acreage, location, and individual operation practices that impact risk.
Estimated Pricing: $10-15 per $100 of coverage
Property Insurance
Property insurance provides important financial protection for fruit farms and can help them continue operations even after disasters damage buildings, equipment and crops. The top benefits of property insurance for other noncitrus fruit farmers include protection from property damage or loss, reimbursement for equipment issues, coverage for buildings and structures, replacement cost coverage, and business interruption insurance. Property insurance also helps protect significant investments in buildings, equipment and crops from risks like fires, storms or flooding that could financially ruin a farm without proper coverage. Based on typical factors, the estimated average annual premium for property insurance for farms in this industry covering around 100 acres would be around $4,500.
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Based on typical property insurance pricing factors such as types of equipment and facilities, occupancy level, location risks such as wildfire or flood risk, the estimated average annual premium for property insurance would be around $4,500. This is calculated based on averaging premium quotes from several insurance providers for typical farms in this industry with orchards/fields, barns, equipment and residential buildings covering around 100 acres of land.
Estimated Pricing: $4,500
Workers’ Compensation Insurance
Workers’ compensation insurance provides important protections for fruit farming businesses and their employees. It covers medical expenses and lost wages for employees who are injured on the job, helping them recover from injuries while continuing to support themselves financially. It also protects the business from costly lawsuits if an employee is hurt. Injuries are common in fruit farming due to risks like operating machinery, falls, heat stroke, and injuries from equipment or weather elements. The coverage helps businesses stay compliant with state laws and promotes loyalty from employees by demonstrating care for their health and financial security after injuries. Estimated pricing is around $2.75 per $100 of payroll on average for fruit farming operations.
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Based on national average workers’ compensation insurance rates for agricultural operations and factoring in the injury rates for fruit farming being higher than average due to risks from operating machinery and working with ladders/lifts, the estimated average annual pricing would be around $2.75 per $100 of payroll. This price was calculated using an estimated experience modification factor of 1.15 and considering average wages and employee counts at businesses in this industry.
Estimated Pricing: $2.75/$100 of payroll
Business Interruption Insurance
Business interruption insurance is an important type of coverage for noncitrus fruit farming businesses to protect their income and operations from losses due to unexpected disruptions. Top benefits of this insurance for other noncitrus fruit farms include providing funds to cover expenses if operations must shut down temporarily, covering loss of income and extra costs from crop damage by disasters, and protecting cash flow to help the business stay afloat during downtime and recovery. Common causes of loss this insurance can address involve property damage, equipment breakdown, weather events damaging crops, and diseases or pests reducing yields. Pricing is estimated at 0.7-1% of annual revenues on average for NAICS code 111339 businesses.
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Based on typical pricing models for agricultural businesses, business interruption insurance for other noncitrus fruit farming would be priced at around 0.7% to 1.0% of gross annual revenues. Given the average annual revenue for NAICS 111339 of $573,662 according to the 2017 US Census data, the estimated pricing would be between $4,016 and $5,736 per year.
Estimated Pricing: $4,016-$5,736 per year
Umbrella Insurance
Umbrella insurance provides additional liability protection above primary insurance policies for businesses. It can help protect assets and cover certain risks not covered under standard commercial policies.
Noncitrus fruit farms face various liability risks from equipment, vehicles, injuries on the property, pollution incidents, and certain watercraft that standard policies may not fully cover. Umbrella insurance is especially important for these types of agriculture businesses to ensure adequate coverage for lawsuits and claims.
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Based on typical umbrella insurance pricing models and risk factors for fruit farms, the estimated average annual cost for $1 million in umbrella insurance coverage would be $500-$800. Factors like acreage, location risks like proximity to water, and sales revenue were used to derive this pricing range.
Estimated Pricing: $500-$800
Specialized Equipment Insurance
Specialized equipment is critical for businesses that grow noncitrus fruit crops like berries, grapes and nuts. This type of specialized equipment can include harvesters, irrigation systems, tractors and more – all of which are expensive to replace if damaged. Specialized equipment insurance provides protection for these valuable assets and helps keep fruit farming operations running smoothly when the unexpected occurs.
Top uses of this type of insurance include insuring fruit-picking equipment, heavy machinery, irrigation systems, and gear used for tasks like pruning, spraying and storage. Without coverage, equipment issues could severely impact a farm’s production and income. Pricing typically runs around $2,500 annually based on $500,000 in equipment values.
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Based on typical equipment values and insurance rates for other noncitrus fruit farming operations, the estimated average annual pricing for specialized equipment insurance would be around $2,500. This was calculated based on an estimated $500,000 in specialized equipment values at a typical rate of 0.5% of total equipment value.
Estimated Pricing: $2,500
Conclusion
By having a strong commercial insurance plan in place that includes key policies like these, fruit farming businesses can safeguard their livelihoods and investments. Comprehensive protection helps provide stability to focus on operations and weather unexpected events outside of an owner’s control. Property damage, lawsuits, injuries, income losses and more can then be better managed financially with the right insurance coverage tailored to this industry.