Business Clinic: Advice needed on reviewing farm machinery cover

Whether you have a legal, tax, insurance, management or land issue, Farmers Weekly’s Business Clinic experts can help.

Freddie Braithwaite-Exley, account executive, A-Plan Rural Insurance sets out some advice on reviewing machinery cover.

See also: Business Clinic: who’s who in the insurance claims process?

Q: Farm inputs, machinery, and insurance costs all seem to be on the rise. I want to tidy things up and save where I can. I have read your advice on reviewing buildings sums insured and maintenance plans, but what should I be doing to review farm machinery insurance cover?

A: As insurance brokers for thousands of farms across the UK, we are very aware of the rising costs facing farmers.

As well as reviewing buildings sums insured and maintenance plans, there are other ways to get the best from your insurances.

It’s worth saying at the outset that you should avoid removing insurance covers that leave your business exposed, but fine tuning them will help you save money.

This means making sure the machinery, the sum insured and the liabilities showing on your schedule are a true reflection of what you have.

Make sure it is enough, but there is no point covering machinery that has been sold, replaced, or wouldn’t be claimed for.

In addition to improving accuracy, proactive management of risks and plans to prevent losses in the first instance help show your farm in the best light possible to insurers, who themselves are facing larger and more frequent claims and as a result are becoming more risk averse.

Evidence of risk management, maintenance programmes and risk assessment will help you obtain competitive cover now and future-proof the business. It can also help with settling claims effectively and efficiently.

Maintenance and inspections

For some, now is the time to tidy up the farm and tackle some much-needed maintenance. Machinery, tools and equipment should be part of your review list.

You should ensure all farm machinery and equipment is safely and securely stored, well maintained, and that anyone who is to use it is appropriately trained and licensed. 

If you have additional security measures such as locked gates, CCTV or trackers, these will all be positives for insurers.

This is also a good opportunity to ensure you are up to date with any inspections. There are several good reasons to do so, not least compliance with government regulations and ensuring general safety.

The Health & Safety Executive (HSE) website includes a list of what should be inspected and how often.

The inspection can be undertaken by anyone who has enough knowledge and experience of the equipment to know what to look at.

The HSE defines a ‘”competent person” as “someone who has the necessary skills, experience and knowledge to manage health and safety”.

However, you can also buy inspection services from your broker or insurer for a reasonable annual cost.

Regular and documented maintenance and inspections will help prevent accidents, but also support your claim or defence if the worst does happen.

Ensure your equipment is suitably insured

It is important to keep track of where and how machinery is insured. Some equipment will be best insured on a farm policy, others on a motor policy, and some may require separate policies altogether.

Machinery can be insured for standard perils such as fire, flood and theft. However, you might also consider breakdown cover or cover for hired equipment.

If you are unsure of your current position, check with your insurance representative. They may be able to suggest ways of simplifying your insurances without compromising on cover.

Now more than ever, it is crucial that farmers do what they can to manage risk, to remain insured effectively and in control of their premiums.

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