Farmers warned to brace for business insurance changes

Farmers are being warned to brace themselves for one of the largest shakeups in business insurance, which is due to come into force in August 2016.

Insurance industry experts are warning farmers that the changes, which are due to come in from 12 August 2016, will see them have to put aside far more time than ever before to ensure that their policies are fully compliant. The changes could also see every member of the farm’s staff involved.

In addition to business insurance, any firm employing staff to work in potentially dangerous conditions such as around farm machinery is required by law to have adequate employers' liability insurance in place. This is to cover the cost of any accidents that may take place on the premises or as the result of the company’s off-site work.

The Insurance Act of 2015 will force farmers to provide evidence to authorities that they have carried out rigorous tests to adequately asses the risk level to staff. To produce this evidence, farmers may now have to involve accountants and other third-parties to document their risk assessments. Failure to do so may see their insurance policies voided and all premiums lost.

All this means is that the onus is now on farmers to correctly supply all the required information to their insurance broker, whereas it used to be the other way round. Industry analyst Paul Graham said: “It’s terribly important that farms and rural businesses better prepare their information.

“It is their responsibility to disclose the information, so expect to be asked more questions when applying for or renewing insurance.”

Therefore, farmers must ensure that all the information given is thoroughly researched and is correct to the best of their knowledge. This means proving that they have carried out a reasonable search to ensure the fullest information has been provided to the insurance broker providing their cover.