How can a farmer insure his stocks?

Given the recent information about the theft of crop protection products in Latvia, we would like to provide a brief explanation of the fact that insurers offer both standard property insurance and special solutions for farmers. It is possible to insure production equipment, goods, warehouse stocks (seeds, crops, fertilizers, crop protection products) and other property belonging to the farmer.

What to consider:

• The price of an inventory insurance premium (policy) will be determined by taking into account the value of the inventory, the type of inventory, the room/location where the inventory is stored, and the selected deductible.
• The value of inventory must be accurately determined to avoid an underinsurance situation.
• The higher the deductible you take on, the cheaper the insurance policy will be.
• Talk to your insurer about including the types of perils you are most concerned about in your policy.

Some insurers have developed new solutions that take into account the fact that farmers may have a lot of crops and raw material stocks at one time, but almost none by spring. This way, farms can avoid overpaying for the amount of insured stocks.

Inventory insurance can cover losses incurred in the following cases:

• Fire damage – caused by fire, lightning strike or explosion. (Example: a warehouse containing supplies is destroyed by fire.)
• Due to natural disasters – storm, flood, hail. (Example: a storm damages a company's roof, causing water to leak into a warehouse and spoiling inventory.)
• Due to a liquid or vapor leak. (Example: A leak caused by a pipeline accident damages supplies.)
• Due to malicious actions of third parties – burglary, robbery or vandalism. (Example: a truck carrying supplies is stolen.)
• Damage (does ours offer this?) (Example: supplies are stored at a certain temperature and they spoil due to a power outage.)

Tips for purchasing a policy and staying safe:

• When choosing a policy, consider the following factors: type of coverage offered, policy price, deductible, insurer's reputation and financial stability
• Be honest and open with your insurer about your business and the property you are insuring, this will help you purchase the coverage you need.
• Read the policy carefully before signing to understand what is and is not insured.
• Notify the insurer of any changes, such as new inventory or a change of location.
• If an insured event occurs, submit a claim immediately.
• Install security systems to protect your stock and inventory from theft and vandalism.
• Store your supplies in a safe and appropriate place.
• Consolidate your insurance policies: If you have other types of insurance, such as business liability insurance or commercial property insurance, you may be able to save money by purchasing all of your policies with one insurer.

Important! Insurance is based on the theory of probability – many people buy insurance, but only a few people have accidents. The client buys a policy every year, but an accident happens once every 10 or 20 years, so the price of the policy is much lower compared to the value of the property or inventory. If this balance is disrupted, the essence of insurance is destroyed and it does not work. Another nuance – if a client has accidents every year or even more often, the insurer will take this into account and increase the price of the policy accordingly or will not want to insure such a client.