insurance community university dairy operations 1 the webinar will begin shortly. there is no...

Insurance Community University

Dairy Operations

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Your Instructor Today

Mike Sergeant , AFIS Sales & Service Director, The Hartford

Financial Services Livestock

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Sponsored by: www.HartfordLivestock.com


What This Class Will Cover

1. Background on Dairy Operations2. Specific types of Dairy Insurance3. Important insurance considerations for

the Dairy Operation

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Background on the Dairy Operations

Some Definitions

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Definitions

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Definitions

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Definitions

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Dairy Coverages

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Definitions

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Contaminated Feed & Water Endorsement• Limits Available• Deductibles• Rates are per head/month and include

an exclusion for terrorist acts

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Transportation of Dairy Cattle

• Cargo Coverage for Livestock• Transit – Cargo Insurance – Stand Alone• Part of the Farm Package – Scheduled Values-

Be aware of per head limits.• Death Only or Death & Crippling while being

transported.• Many Dairies have at least one tractor trailer

unit to haul their livestock.• If use common carrier obtain Cert. of Ins.

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Feed and Grain Coverage

• Average Farm Policy Limits for Hay - $10,000. per Stack (Higher Limit available by endorsement)

• Feed Expenses Rising- i.e. corn• Supplements are a costly inventory.

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Milking Parlors

• Where the milking process is performed• Cattle are brought in 2-3 times a day• It takes 15 minutes to milk a cow with a

machine

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Milking Parlors

• Styles– Herringbone– Parallel– Swing– Rotary (Carousel)

• Boiler & Machinery Coverage (EB)– The complexity & expense of modern dairy parlor

equipment requires additional insurance for breakdown as well as increased property limits to include replacement costs.

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http://media.eatwisconsincheese.com/dairyimpact/statistics/Infographics.aspx


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Semen & Embryo Storage

• More efficient to A. I. cows and produce controlled results.

• Storage tanks using liquid nitrogen are often on premises.

• Values can be upward of• $1million per tank.• Bloodlines irreplaceable

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Cheese Operation—Artisan Cheese

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Cheese Operation

• Americans eat an average of 33 pounds per person annually.

• Artisan cheese is the fastest growing segment of the cheese marketplace according to a recent A.C. Nielsen study.

• Artisan cheese which is processed on the dairy using only the milk from the herd of that dairy is called “farmstead cheese

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Cheese Operation—Protection for the Producer• Protection against financial loss arising

out of the legal liability incurred by a manufacturer, merchant or distributor because of injury or damage resulting from the use of a covered product.

• CGL may contain an Exclusion for “Product Recall”

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Cheese Operation—Protection for the Producer• Accidental Product Contamination (APC)• Products Extortion Coverage• Products Tampering Coverage• Malicious Product Tampering (MPT)• Specialty Form – Not all forms are

Created Equal

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Hunting On Diary Farm Property

• Exposures– Liability – Hunter injured or killed – Security – Allowing strangers on property– Bio-Security – Possible contamination– Theft – Loss of equipment or drugs

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Hunting Risk Management

• Limit access to friends & family• Buy Liability Insurance

– Can be written under CGL but few if any underwriters will accept the risk

– Premiums higher

• Enroll in a Hunter Access Program which has an insurance program

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Hunter Access Programs

• Wildlife Division Management Unit of Dept. of Natural Resources (Midwest & Southern States)

• Dairy signs lease with program and is listed in a guide available on line.

• Hunters issued daily permits at Dairy headquarters and must register each time the property is visited.

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Benefit of Hunter Access Program• Dairy receives payment to allow public

hunting on their property.• Landowners are free from liability as stated in

P.A. 451, “No cause of action shall arise for injuries to persons hunting on lands leased under HAP unless the injuries were caused by the gross negligence of willful and wanton misconduct of the owner, tenant or lessee.

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Hunting Lease Liability Insurance

• Offers liability insurance protection• Commercial General Liability• Guest Medical Payments• Fire Legal Liability $50,000• CGL $1,000,000 per

Occurrence/$2,000,000 Aggregate

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Craft and Hobby Exposures

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Craft and Hobby Exposures

• On Premises—usually attached to house• Often run by wife or daughter of insured• Premises exposure

– Liability (slips & falls)– Security (unknown people allowed on

premises

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Petty Zoos

• In 2006 E.coli infections in Washington & Pennsylvania caused 56 illnesses & 19 hospitalizations that were all linked to school & family visits to farms with petting zoos.

• Public phobia of E.coli is at an all time high and can cause a public relations nightmare for the Dairy.

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Petting Zoos Risk Mangement

• Risk Management– Information should be provided about the risks:

Calves, goats & poultry pose a great risk.– Post signs and provide a wash station and be sure

children under the age of five are supervised– Food should be served in a separate area– Hand to mouth activities- carrying toys or pacifiers

should not be permitted.

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Hay Rides

• In October Dairy Employees, 2006, on a farm in rural Wisconsin a church group was invited to participate in a hayride by child’s parents who owned the Dairy where the ride was to be held.

• Two children fell backwards off the wagon and were run over by the back wheels. One child suffered a head injury and had to be hospitalized.

• Result: Parents of injured child sued the Dairy and were awarded $750,000. 00 in damages.

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Hay Rides Community Exposures

• Schools and Church organizations are often allowed onto dairy to participate in Farm experience.

• Be sure seating is appropriate and safe.• Instruct driver of team to go slow and

avoid ruts in road or pasture.• Keep noisy children away from horses

and wagon.

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Dairy Employees

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Exposures

• Usually long term employees – average 5 years.

• Live on premises• Housing provided as part of benefit

package• Family of worker occupies housing.• Majority of workers are Spanish

speaking males.

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Insurance Considerations

• Housing may be covered by “standard” CGL to protect landlord.

• If injury is due to faulty housing Worker’s Compensation could subrogate back against “landlord”

• Dairies are being informed that if they provide housing for five or more employees they are considered a “labor camp” and must apply for permit and pass inspection.

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Risk Management Suggestions

• Accident & Disability Policy in Worker’s Name. Source of payment for injury besides Worker’s Compensation.

• Example: $40,000 Max payment for any accident no matter if job related or not- include medical, disability, loss or life.

• Separate Property & Liability Coverage on Worker’s housing to include family of worker.

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Prevention & Safety

• Have Warning Signs posted in both English & Spanish.

• Instruct employees using visual supervision and repetition

• Provide Loss Control services to include the Worker’s Family members.

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Pollution and Run Off Exposures

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Methane Digester System—How it works• Manure is flushed to a collection point where

solids are removed and recycled. The manure wastewater is then sent through the bottom of the digester where it is retained for 40-60 days. As manure wastewater moves up in the digester, bacteria digest the waste and produce a methane rich gas known as biogas. Biogas is typically 60% to 80% methane.

• The gas is used to power a generator which creates electricity.

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DisclaimerInsurance forms and endorsements vary based on insurance company; changes in

edition dates; regulations; court decisions; and state jurisdiction. This instructional materials provided by Insight is intended as a general guideline and any interpretations provided by Insight do not modify or revise insurance policy

language. The authors of these materials, Insight Insurance Consultants is a division of Insight Consulting and Management Inc. In providing these materials, Insight assumes neither liability nor responsibility to any person or business with respect to any loss that is alleged to be caused directly or indirectly as a result of

the instructional materials provided. Copyright 2010 – 2012 All Rights Reserved

www.insurancecommunitycenter.comwww.HartfordLivestock.com

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insurance community university dairy operations 1 the webinar will begin shortly. there is no...

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