Insurance is one of those things that you spend money on but hope you’ll never need to use. If you have a smallholding you should consider whether you need specific smallholding insurance – most household policies won’t cover a lot of the additional risk smallholding brings, and a good smallholding insurance policy can provide peace of mind that those risks are covered.
Why might you need it?
While most of us have general household insurance policies, these are unlikely to cover the additional risks that come with running a smallholding. For example most household policies only cover domestic animals, and won’t include any public liability cover.
And we’ve all heard anecdotes of livestock causing damage (usually rams!) to visitor’s cars and other property, or getting loose on the road and causing near misses or accidents.
This is where smallholding insurance policies come in. If you have livestock, machinery, outbuildings, equipment, people visiting your property on business, or you sell produce, then you are likely to need smallholding insurance.
The first thing to do is to think about where the increased risks are over a non-smallholding (or farming) household, from your smallholding activities.
What cover do you need?
Before you approach an insurer about getting a policy, do some preparation and try to be clear in your own mind about what you want to be covered for. Different people have different attitudes to risk, for instance your livestock may be docile and of more sentimental value than financial value, so you may not wish to cover them.
Check your existing cover
Also check for cover in any existing policies you have. We ended up consolidating our insurance policy with one company to cover household and smallholding because there was some duplication of cover – it worked out cheaper in the end and we have a single point of contact, making claims much more straightforward.
Below are listed the most common areas that smallholding policies will cover, although one option is to split your cover with different insurers if you’re willing to shop around. For instance a specialist machinery insurer may provide more cost effective cover for tractors and trailers than you would get under a general smallholding policy.
Equipment, machinery and tools
Most smallholders have a collection of tools, machinery and equipment that would be costly to replace without cover. Think carefully about the level of cover you need – you may not appreciate the full value of what you have until you write it down, and an inventory can help in the case of theft, fire or other loss.
Remember to include any tools and equipment that are primarily for smallholding use – garden tools, power tools (drills etc), chainsaws, hedge trimmers, and mowers. Also include sundries and utensils – we probably have hundreds of pounds worth of pots in our potting shed over winter, which should be covered against loss.
Make sure the policy covers tractors, ATVs, ride-on-mowers, trailers, horseboxes and any other vehicles if you have them.
Pedigree livestock can be worth more than anything else on your smallholding, so be sure your policy reflects their replacement value, for theft, unexplained disappearance, malicious damage and loss through fire or flood.
If you regularly show livestock you may need to demonstrate adequate cover as a condition of entry.
Feed and medicines
If you have more than a handful of livestock, and with the increasing price of animal feed, your feed store may be an increasingly attractive target for thieves, and its content will almost certainly need to be covered against loss. Similarly for medicines – calculate the value of stock you usually keep and make sure it’s covered.
Transportation of livestock
Your domestic motor policy is unlikely to cover you for the transportation of livestock, so if you make more than the occasional journey moving stock you may wish to cover the risk of accident and subsequent damage or loss to you, your vehicles, and your livestock, as well as other road users.
Working about a smallholding can be dangerous, and if you depend on your good health to any degree for your living you should check that any income protection insurance you already have covers you in the event of an incapacitating accident while working on the smallholding.
If you sell produce, for example at a farmer’s market, you’ll need product liability insurance cover. The level may be specified by the venue (many insist on a minimum of £5m), but make sure you’re covered.
Public and employers liability
If you routinely have members of the public on your property, for example because you run courses or operate as a B&B, or it there is a risk of your livestock escaping and causing an accident, then you should seriously consider public liability cover.
If you employ staff to assist on the smallholding you will also need employers liability cover. Be aware that your liability may extend to unpaid help, including WOOFers and other volunteers – take advice from the insurer to be sure you’re adequately covered.
Again, check your household policy to see whether outbuildings are covered, and if so what the scope of the cover is.
Choosing an insurer
In recent years more specialist smallholding insurance companies have emerged, so there is a lot more choice than say a decade ago, and in theory the market should be more competitive, leading to lower premiums.
Most insurers define a smallholding as under 100 acres, some under 50 acres.
Information needed for a quote
You’ll need to supply a fair bit of information to get an accurate quote. This needs to include:
- The area of land you occupy or farm
- What you use the land for
- The livestock you keep – type, breeds, and value
- The crops you grow, including orchards and other long-term crops– type and value
- The value of any outbuildings
- The value of equipment and machinery
- The value of feed and forage you keep
- Details of any recent claims
Don’t opt for a farm policy – in theory there’s less that can go wrong on a smallholding, and on a smaller scale, so don’t pay for cover you don’t need.
Finally, take the time to shop around. Most smallholding insurance policies will cost hundreds of pounds a year, so get quotes from as many companies as possible for the cover you need, and don’t be afraid to negotiate.
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