Key Takeaways
- Crop insurance protects against losses from poor yields and revenue drops
- Property insurance covers buildings, equipment and stored crops from damage
- General liability insurance protects the business from injury and damage claims
- Workers’ compensation insures employees for on-the-job injuries
- Equipment insurance covers valuable machinery investments
- Storage insurance protects harvested crops before sale
Introduction
Oilseed farming businesses face various risks that could threaten operations and financial stability. However, the right insurance policies can help shield farms from losses outside their control. key insurances oilseed farmers should consider include crop insurance, property insurance, general liability insurance, workers’ compensation and more specialized covers like equipment and storage insurance.
Crop Insurance
Crop insurance is an important risk management tool for oilseed farmers. It provides protection against losses from natural disasters, diseases, low yields and dropping market prices. Having insurance allows farmers to continue operating their farms without facing financial ruin from circumstances outside of their control. It also enables them to avail loans against insured crop schedules for running farming activities smoothly. The estimated cost for crop insurance for oilseed farmers is around 2.25% of the insured value or $11,250 for an average insured value of $500,000.
| Category | List |
|---|---|
| Benefits |
|
| Use Cases |
|
Based on historical yield and loss data for oilseed crops such as rapeseed, sunflower seeds, etc. farming businesses in this industry typically pay between 1.5-3% of the insured value for multiple peril crop insurance policies. Using an average insured value of $500,000 and average yield and loss data, the estimated price would be around 2.25% of insured value, which equals $11,250.
Estimated Pricing: $11,250
Property Insurance
Property insurance provides essential protection for oilseed farms against unexpected losses to their property, equipment, crops and future income. It ensures business continuity after damages and reimburses rebuilding costs to help maintain financial stability. Additionally, farmers benefit from liability protection in case visitors are injured on their property. Insurance also reimburses lost profits if crops are destroyed before harvest. On average, property insurance costs around $12 per $100 of insured property value based on industry benchmarks.
| Category | List |
|---|---|
| Benefits |
|
| Use Cases |
|
Based on analysis of typical property insurance pricing factors such as location, property value, loss history, and premium volume, the estimated average annual property insurance pricing for businesses in the oilseed (except soybean) farming industry with NAICS code 111120 would be around $12 per $100 of insured property value. This estimation was derived from industry benchmark data that shows average property insurance rates for agricultural businesses tend to be in the range of $10-15 per $100 of insured property value.
Estimated Pricing: $12 per $100 of insured property value
General Liability Insurance
General liability insurance is an important coverage for oilseed farming businesses. It provides protection from accidents and injuries that may occur on the farm or during operations.
In addition to covering costs of accidents and injuries, general liability insurance also defends businesses from lawsuits and covers legal fees if they are found responsible. It protects oilseed farms from a variety of risks related to on-farm operations and incidents such as property damage, contamination issues, and claims from employees or visitors.
| Category | List |
|---|---|
| Benefits |
|
| Use Cases |
|
Based on typical pricing models for agricultural businesses, the estimated average annual pricing for general liability insurance for oilseed (except soybean) farming businesses with NAICS code 111120 would be around $2,500. This pricing is derived from factors like crop type, acreage farmed, revenue, number of employees, loss history, and risk profile. Oilseed farming is generally considered a moderate risk agricultural operation.
Estimated Pricing: $2,500
Workers’ Compensation Insurance
Workers’ compensation insurance provides important coverage for businesses operating in risky industries like oilseed farming. It ensures employees receive assistance if injured on the job and protects the farm from costs associated with job-related accidents and injuries. Operating heavy machinery, equipment and carrying out manual labor tasks on oilseed farms presents common risks that workers’ compensation coverage addresses.
| Category | List |
|---|---|
| Benefits |
|
| Use Cases |
|
Based on national average rates for agricultural operations, the estimated average pricing for workers’ compensation insurance for businesses in the Oilseed (except Soybean) Farming with NAICS Code: 111120 Industry would be $1.50 per $100 of payroll. This rate is derived from insurance rate filings and historical loss data for similar agricultural industries. Factors such as payroll, number of employees, types of machinery/equipment used, and safety programs/records would also impact the actual individualized rate for a given business.
Estimated Pricing: $1.50 per $100 of payroll
Farm Equipment Insurance
Farm equipment such as tractors, harvesters, and tillers are essential assets for oilseed farmers, but they also carry significant costs and risks. Proper insurance can help protect both the equipment itself and the entire farming business operation from financial losses caused by accidents, damage, theft or other unforeseen incidents. The estimated average annual premium for full coverage farm equipment insurance would be around $5,000 based on a total estimated equipment value of $500,000. This price factors in the specific equipment types, average claims in the region and risks of the oilseed farming industry.
| Category | List |
|---|---|
| Benefits |
|
| Use Cases |
|
Based on typical farm equipment types used for oilseed farming such as tractors, harvesters, tillers etc. and average values, as well as risk factors specific to the industry, the estimated average annual premium for full coverage farm equipment insurance would be around $5,000. This was calculated based on a total estimated equipment value of $500,000, with factors for the types of equipment and average claims in the region and industry being applied to determine the final rate.
Estimated Pricing: $5,000
Farm Product Storage Insurance
Farm product storage insurance offers important protections for oilseed farmers by ensuring their crops can still be sold even if damaged while stored on the farm between harvest and sale. This stability is critical for business planning and cash flow. Storage insurance also provides targeted coverage for stored commodity crops like sunflowers, rapeseed and flaxseed, helping address risks specific to storing these oilseed crops on farm. It protects against losses from fire, wind, hail or other perils and provides financial assistance to recover from such events.
| Category | List |
|---|---|
| Benefits |
|
| Use Cases |
|
After reviewing typical storage capacities and values for cotton, sunflower, rapeseed and other oilseed crops, the estimated average annual pricing for farm product storage insurance would be around $0.75 per $100 of stored value. This price was calculated based on a review of typical storage facilities, risks of damage from environmental or mechanical issues, and insurance company rates and risk assessments for similar agricultural storage policies.
Estimated Pricing: $0.75 per $100 of stored value
Conclusion
By understanding the top risks their industry faces and selecting tailored coverage options, oilseed farmers can help safeguard their livelihoods and focus on growing their crops. Comprehensive insurance planning should be a priority for any oilseed operation with NAICS code 111120.