Farming is more than a business. It is often a family legacy, a home, a workplace and a collection of valuable assets built over generations. From machinery and sheds to livestock, crops and vehicles, a single fire, storm, accident or liability claim can affect daily operations and the farm’s future.
General insurance should therefore be treated as part of the farm’s risk-management plan, not simply as an annual expense.
Priority 1: Protect the assets that keep the farm operating
Start by identifying the assets the farm cannot function without. These may include tractors, harvesters, irrigation systems, pumps, fencing, workshops, grain storage and livestock facilities.
Check whether each asset is insured for the correct replacement value and whether cover applies while equipment is used away from the main property or transported between locations. Replacement costs can rise quickly, particularly after a regional disaster. Underinsurance can leave a business funding a major shortfall, and some policies may reduce a claim when the declared value is too low.
Priority 2: Protect income, not just property
A farm may survive the physical loss of a shed or machine but still struggle if production stops for months. Business interruption insurance can help cover ongoing costs following an insured event, such as wages, finance commitments and operating expenses while the business recovers.
Consider how long it would realistically take to rebuild infrastructure, replace specialised machinery, restore essential systems, re-establish livestock numbers or return land to production. The indemnity period should reflect the true recovery timeline, which may extend beyond the repair of the original damage.
Seasonal income patterns also matter because losing production shortly before harvest can have a very different financial effect from an interruption at another time.
Priority 3: Review liability and people-related risks
Farms can have employees, contractors, family members, customers, suppliers and visitors on the property. Public liability cover is important where farm activities could cause injury or property damage to another person. Product liability may also be relevant when selling produce, livestock, food products or other goods.
Discuss the farm’s activities with an insurance adviser, including farm stays, roadside stalls, events, contracting work, agistment, spraying, transport or machinery hire. A traditional farming policy may not automatically cover every additional income stream or activity.
Oversight 1: Forgetting to update the policy
New sheds, solar systems, silos, machinery, fencing, renovations and additional land can change the farm’s risk profile. Insurance should be reviewed annually and whenever a major asset is purchased, sold or upgraded.
Keeping an asset register with photographs, serial numbers, invoices and valuations can make claims easier to support. Insurers commonly request evidence such as photographs, ownership records and contracts when assessing a claim.
Oversight 2: Assuming every natural event is covered
Fire, storm, flood, hail, frost, machinery breakdown and livestock losses may be treated differently between policies. Some events may be excluded, limited or available only as optional cover.
Read the Product Disclosure Statement and ask specifically how the policy responds to the major risks affecting your location and type of farming enterprise.
Oversight 3: Choosing insurance on price alone
The cheapest premium may come with higher excesses, narrower definitions, lower sub-limits or important exclusions. Compare the quality of cover, claims support and policy wording rather than price alone.
Australian Government guidance recommends discussing business insurance needs with registered insurers or brokers and checking their licensing status.
A farm insurance review should consider the whole operation: property, machinery, vehicles, livestock, crops, liability, income and emerging activities. Tailored advice from an experienced insurance professional can help identify gaps and build cover around the farm’s actual risks and recovery needs.
This information is general in nature and does not take into account your individual circumstances. Consider seeking professional insurance advice before making decisions about cover.
If this article has inspired you to think about your unique situation and, more importantly, what you and your family are going through right now, please get in touch with your advice professional.
This information does not consider any person’s objectives, financial situation, or needs. Before making a decision, you should consider whether it is appropriate in light of your particular objectives, financial situation, or needs.
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