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Agricultural Programs
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spacerArticles on agricultural insurance topics
from AAIS's Viewpoint magazine

 

 

 

 

 

AAIS is second to none in its commitment to serving farm and agriculture insurers with sound programs. Whether you are a regional farm insurer, a national carrier, or an MGA program writer, you will find no better combination of product platforms and support service for insuring family farms or large commercial farming ventures.

 

More than 150 companies, combined, write more than $500 million of premium each year using AAIS farm and ag products. That figure includes half of the top farm insurers in the country, but does not include more than 250 farm mutual insurers in seven states that access AAIS programs through their mutual associations.


The Agricultural Commercial General Liability Excess and Umbrella Program (AgXL), developed and filed in 2011, provides three base forms (two umbrella and one excess) and nearly 140 multistate endorsements for tailoring excess and/or umbrella coverage for the needs of a particular risk. MORE

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The AgXL's three base forms are:

  • Farm Commercial Umbrella Liability Coverage, designed to cover liability above underlying limits for farming operations and other operations specifically insured in underlying policies.
  • Agribusiness Commercial Umbrella Liability Coverage, designed to cover liability above underlying limits arising from all of an insured's operations, subject to exclusions.
  • Agricultural Commercial Excess Liability Coverage, which provides essentially "follow form" coverage above underlying limits, generally incorporating the terms of the underlying policies.

The umbrella forms are designed to be used with corresponding forms provided under AAIS Agricultural General Liability Program (AgGL), but they can also be used with any underlying auto, employer's liability, recreational vehicle, watercraft, or, with some modification, general liability policy.

The AgXL's two umbrella base forms give an insurer the option of providing or not providing coverage for personal liability exposures, an important feature of agricultural liability insurance.

The excess form can be used to provide an excess layer of coverage over any underlying auto, employer's liability, recreational vehicle, watercraft, or general liability policy.

As with the AgGL forms, the AAIS AgXL base forms include standard exclusions (war, nuclear hazard, etc.) as well as exclusions specific to agricultural operations. The latter include exclusions for damages arising from certain livestock diseases, chromated copper arsenate (CCA, a substance used to treat lumber) and violations of the Migrant and Seasonal Worker Protection Act.

The nearly 140 optional endorsements provided with the program can be used to extend, limit, or exclude coverage for designated premises, operations, activities or other exposures.

The Agricultural General Liability Program is the first standardized general liability program specifically designed for farms and agribusinesses. As such, its forms and manual classifications may fundamentally remake the way liability coverage is structured for all types of agricultural enterprises.MORE

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The AgGL program features two base forms, each of which can be written on a stand-alone basis or combined in a package policy with any other farm, property, auto, and workers compensation monoline form:

  • The Farm Commercial Liability Form limits coverage to farming and certain related operations, but allows coverage for additional exposures to be added by endorsement or dec page entry.
  • The Agribusiness Commercial General Liability Form functions like a traditional CGL policy in that it provides coverage for all operations of an insured except those explicitly excluded.

Personal liability coverage: Available by endorsement to both base forms.

Chemical drift coverage: "Farm Chemical Limited Liability" coverage built into both base forms.

"Agritainment":

  • The Farm Commercial Liability Form excludes coverage for educational and recreational activities undertaken for compensation, but coverage can be added by identifying such activities on the declarations.
  • There is no restriction of coverage for such activities under the Agribusiness Commercial General Liability Form, but coverage can be excluded by endorsement.

Custom farming:

  • Specifically defined and insured under the Farm Commercial Liability Form, provided receipts from such operations do not exceed an established annual threshold.
  • Covered unless explicitly excluded under the Agribusiness Commercial General Liability Form.

Exclusions:
Extensive and up-to-date, including exclusions that address liability from certain logging or lumbering operations, the Migrant and Seasonal Agricultural Worker Protection Act, and animal diseases.

Program manual:
Contains more than 300 agricultural classifications organized into 21 categories. For most classes, the rating information supplants traditional acreage-based rating with sales-based rating information that is more sensitive to inflation and better reflects the growing percentage of agricultural revenue from sources other than commodity sales.

The Agricultural Output Program was the industry's first standardized program for insuring property exposures of an integrated agribusiness enterprise. The "AgOP" provides a streamlined base for insuring agricultural risks that don’t fall into standard commercial classifications, and its flexible rating procedure is ideally suited to the unique and varied nature of agricultural operations.MORE

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Modeled in part after the AAIS Commercial Output Program (COP), the AgOP provides broad commercial property and inland marine coverage in a single policy form. Coverage for builders risk, computers, and mobile equipment is provided in the same form as coverage for buildings and personal property, including stock.

By doing this, the AgOP simplifies the process of structuring property coverage for an agribusiness account. The combination of commercial property and inland marine coverages in a single form reduces the potential for coverage gaps that can occur when property forms are packaged with inland marine floaters.

Also, coverage for computers, mobile equipment, and other inland marine exposures applies to the extent usually provided when written under stand-alone inland marine floaters, including coverage for loss caused by flood and earthquake. Earthquake and flood coverage for loss to building property, other personal property, and stock can be provided by endorsement.

In addition, four time element options are available in the base form, and a separate crime coverage part provides a broad range of options that incorporate features of highly competitive commercial crime programs.

At the same time, the AgOP gives insurers several ways to control their exposure. Most importantly, carriers can determine individual sublimits for additional, extended, supplemental, and crime coverages by entering them in the declarations. By putting "0" for an entry, a carrier can exclude the coverage, in effect.

AgOP users can also choose between blanket or scheduled coverage, or combine the two by granting blanket coverage with exceptions for certain scheduled locations, structures, equipment, stock, or other personal property.

The AAIS Farmowners Program is the program of choice for hundreds of farm carriers and their reinsurers. It was the first standard program to introduce modular components for writing residential property, farm property, and liability coverage for farms. It recently introduced the industry's first standardized equipment breakdown coverage parts for farm and household equipment. MORE

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The AAIS Farmowners Program utilizes a three-tiered approach to policy construction:

  • A choice among five residential property forms: basic perils, broad perils, open perils-dwelling, open perils-dwelling and contents, and tenants
  • One streamlined farm property form for insuring farm structures and scheduled and/or unscheduled farm property
  • Four options for liability coverage: AAIS farm personal, AAIS farm commercial, AAIS general commercial, or any industry CGL
    (A policy can also be written for property coverage only.)

The program provides the industry's only standard endorsement option for insuring home-based businesses under a farmowners policy, plus the equipment breakdown coverage options for both farm and household equipment.

The program also includes an income coverage option written to apply only to specified farm activities identified on a schedule and to avoid open-ended exposure for the diverse activities that can take place on farms.

The Farm Inland Marine Program provides standardized forms and rating information for insuring unique farm and agricultural exposures. Its forms can be used with AAIS or independent insurance programs. MORE

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This program includes updated Farm Machinery and Livestock forms and rating information previously provided under the AAIS Personal Inland Marine Program. It also includes forms and rating information for a newly developed Farm Irrigation Equipment class.

While the language in the Farm Inland Marine forms addresses both family farms and commercial farming ventures, the policy provisions are patterned primarily after those used in commercial lines.

The Farm Properties Program provides forms, rules, and rating information for writing fire and extended coverages for farm dwellings, outbuildings, and farm personal property. These monoline policies help insurers write accounts that don't need or qualify for a package policy, such as farm rental properties and vacant farmsteads. MORE

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The Farm Properties Program provides three residential property forms that correspond with those in the Dwelling Properties Program, with an option to exclude a dwelling and insure only the farm property.

The forms provide five principal coverages: residence, personal property, additional living costs/fair rental value, farm personal property, farm barns/buildings/structures.

The program includes farm-specific coverage options, including coverage for added animal perils, livestock blizzard peril, and borrowed/rented/leased farm machinery.

The Farm Umbrella Program, the industry's first such program, provides both a farm personal and a farm commercial umbrella form to coincide with the underlying farm liability policy. MORE

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Both the personal and commercial umbrella forms can be written over underlying policies from any source that cover liability arising from autos, recreational vehicles, watercraft, employment-related injury, and other causes.

Umbrella coverage for these exposures applies strictly on a "follow form" basis, thus protecting an umbrella carrier from exposure to liabilities that have not been underwritten and priced in the underlying layers.

 

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