How agri insurance can help protect your business

With more diversification comes more risk, says Andries Wiese, national business development manager and head of agri insurance at Hollard. Producers need to work on a risk management strategy tailored to their business’s specific needs to protect them against loss and financial liability. He spoke to Susan Marais about how to approach this task, and where to get the right sort of advice.

- Susan Marais

With the cost-price squeeze in agriculture being worse than ever, farmers need to watch every rand in order to make a reasonable profit. So, while one could probably insure anything for its true value by paying a high enough premium, doing so might not be wise. What, in your opinion, should a farmer be insuring?

It’s 100% correct to note that anything can be insured if you’re prepared to part with enough money. But as a farmer you need to take a step back and decide whether an insurance quote is a fair reflection of the risk and whether it makes sense for you and your farm.

No two farming businesses are alike. Mechanisation, seed, management, and input costs are just some of the things that vary greatly from one farm to another. As a result, there isn’t simply one insurance recipe that works for everybody.

To begin with, as a farmer you should know your business like the back of your hand. The better you can describe your farm and its underlying risk to an insurance broker, the better he or she will be able to advise you on how to incorporate a sensible risk strategy into your business plan.

Remember, too, that insurance should be integral to your business, and not merely an add-on.

So where do you start if you want to insure your farm?

The first step is to understand your own risk. A young, healthy person with no medical history of illness can get away with less health insurance coverage than a sickly, middle-aged person who needs to support a family.

Equally, you need to understand your farming risk. As a rule of thumb, you should insure anything that threatens the survival of your business.