Business interruption insurance for agricultural businesses
On a farm, downtime is not measured in weeks but in growing cycles: what you do not sow this spring or harvest this summer, you cannot make up later this year.
The calculator and the quote form below are in Dutch. Prefer to do this in English? Email info@finassverzekert. nl or call 072 - 509 24 56 and we will take it from there.
Work out for yourself what it would cost.
Enter your details; you will receive a proposal within one working day.
We compare the offerings of several insurers
An adviser checks whether the cover suits your activities
A premium indication, not personal advice. Prefer to talk it through? Call 072 - 509 24 56.
In brief
Business interruption insurance is a consequential-loss insurance: there must first be covered material damage to your shed, barn, machinery or stock. Only then does the policy pay for the loss of gross profit during the indemnity period. On a farm that period is the hardest part, because your turnover is tied to a cycle that repeats only once a year.
The gross profit here is turnover minus the costs that fall away at once when work stops: feed, seed, fertiliser, crop protection and contract work. What runs on is the ground rent, the financing on sheds and tractors, paid labour and the depreciation on installations. Rebuilding a dairy or sow herd also takes years; that is not included in the rebuilding time for a shed.
We work through that period with you on the basis of your cropping plan or livestock numbers, and test whether permits, demolition, rebuilding and bringing production back really fit within it. The general structure of the cover is on our page about business interruption insurance.
What does business interruption insurance for agricultural businesses cover?
The structure of the cover in three parts, with an overview per situation below.
The basis
Gross profit
Turnover minus the variable costs that move with it.
Fixed costs continue
Profit margin you lose
Update annually
The term
Indemnity period
Calculate back from full turnover, not from the rebuild value.
Clearance and permits
Rebuilding and fitting out
Winning customers back
Additional costs
Alternative
The additional costs of not standing still.
Temporary location
Outsourcing to third parties
Often cheaper
What is covered
Situation
Business interruption
Additional costs
Downtime after a fire at your premises
Yes
Yes
Loss of turnover after water damage
Yes
Yes
Additional costs to keep going elsewhere
No
Yes
Failure of a supplier
Sometimes
Sometimes
Digital downtime without physical damage
No
No
Loss of turnover due to lower demand
No
No
This overview is general in nature and is not personal advice. What is actually covered, including exclusions, limits and the excess, is set out in the policy conditions and the insurance card (verzekeringskaart) of the insurer; you receive both before you take out cover. Taking out cover without advice? Then read what execution only means for you.
Where things go wrong in practice
Four points that make the difference between a policy that pays out and one that does not.
Set the period in growing cycles, not in months of rebuilding
After a shed fire, the rebuilding is rarely the bottleneck. Demolition, an asbestos survey, an environmental permit and sometimes a nature permit come first, and only then does rebuilding the herd begin. A dairy farm is not back at its old level once the shed is standing, but once the heifers are in milk. In arable farming the same applies per growing year. We put that process on paper before the indemnity period is fixed.
Animal disease and government measures fall outside the cover
Avian influenza, a cull, a movement ban or an order to keep poultry indoors do not cause material damage to your property. The business interruption policy therefore does not come into play, however large the loss of turnover. There are separate animal disease schemes and compensation arrangements for that; they run outside this policy. The same applies to closure or restriction of your business by order of the authorities without preceding fire, storm or water damage.
Failure of climate control, cooling and the milking system
In a closed shed, ventilation is not a comfort but a condition. If the climate computer, the standby power supply or the milking robot fails, there is damage to your animals and to your production. Damage to the equipment itself belongs on machinery breakdown insurance. The interruption that follows is covered only where machinery breakdown is insured as a peril on the business interruption policy. Insurers attach requirements to alarm systems and to a standby generator.
What is not included
Crop failure through drought, hail or night frost is not business interruption but a matter for weather insurance. Lower selling prices, a reduced manure or phosphate right and the loss of a sales contract are also excluded. Digital interruption without preceding material damage falls outside as well; for that cyber insurance is needed. Clearance and remediation costs after a fire belong on the buildings insurance, not here.
What does your premium depend on?
Gross profit by farming sector. Dairy, intensive livestock, arable farming and glasshouse horticulture have a different cost structure and therefore a different basis of calculation.
Indemnity period in growing cycles. A period of two or three years is no luxury when a herd has to be rebuilt. That choice weighs most heavily in the premium.
Construction and fire compartmentation of the sheds. Fire-resistant separation between sections limits the chance of losing the whole herd at once.
Solar panels and roofing. Panels on a shed or barn roof and old roof sheeting affect the likelihood of fire and the time needed for demolition and remediation.
Dependence on one installation or location. A business with a single milking parlour or a single cold store comes to a complete standstill when damage occurs.
Excess or waiting period in days. A longer waiting period before payment begins lowers the premium, but you carry the first period yourself.
Insurers weigh these details differently. That is where your saving is.
How we arrange it
You request a quoteWe take stock of your activities, turnover and wishes.
We compareseveral insurers, on premium as well as conditions.
You receive a proposalWith an explanation of the differences and the exclusions.
We arrange the switchIncluding cancellation, so there is no gap in cover.
Customers rate our service on four aspects: personal service, service delivery, availability and the outcome. The reviews are collected and published by NH1816 and come from customers who have actually taken out a policy with Finass Advies B.V. or reported a claim.
Why are 52 weeks often too short for a livestock farm?
Because the period does not stop when the shed is handed over. After demolition, permits and rebuilding, the herd has to be built up again, and animals only come into production after a rearing period. If the indemnity period runs out while you are not yet back at the old level, the payment stops too. Work back from full production.
Does the policy pay out for avian influenza or a movement ban?
No. An animal disease, a cull and a movement ban are not material damage to your building, contents or stock, and that material damage is precisely the condition for cover. Your loss of turnover is real, but it falls outside this policy. For this risk, discuss the separate animal disease schemes and the compensation arrangements that exist.
Is crop failure through drought or hail covered?
No. Weather effects on the crop are not an insured peril on business interruption insurance. There is separate weather insurance or broad weather insurance for that. What is covered is interruption following, for example, storm or fire damage to your barn, cold store or processing line, because there material damage to your own property does underlie it.
What if the milking robot or the climate installation fails?
Repair of the equipment itself belongs on machinery breakdown insurance. The loss of turnover that follows is covered only where machinery breakdown is expressly insured as a peril on the business interruption policy. Insurers usually attach conditions to this, such as a working alarm system and a standby power supply. Have those clauses checked in advance.
Finass Verzekert is a trading name of Finass Advies B.V. We advise on and arrange non-life insurance on the basis of an objective analysis of several insurers, and receive commission for this from the insurer, which is included in the premium. You pay no separate advice fee. Before you take out cover, we establish your wishes and needs.
You will find our licence, KvK and Kifid details and our complaints procedure at the foot of every page.
