What to do during a hard insurance market

January 23, 2020

As nearly every egg producer is aware, the property insurance market continues to harden. This is true across nearly all commercial property sectors, but is particularly painful for agricultural-related property risks. What should you do in response to the increasing rates and decreasing number of carriers willing to offer terms? Here is a summary of four suggestions to help you make the most of a difficult market. More details will be provided in upcoming United Voices newsletters.

Double down on loss control and housekeeping

Some loss control and housekeeping are habit and not recorded. Begin identifying and recording all that you’re doing regarding loss control and housekeeping. Find holes in your practices and fill them.

Clarify contingency plans

What are your resources in the event of a feed mill, processing plant, layer building, or pullet house loss? Where can you have your eggs processed? Who can mill feed to your specifications? How will you make up for lost production due to lost layers or manipulate your flock to get on schedule if you lose a pullet building?

Confirm your values

Inaccurate values might be the most important of these four points to insurers. Take some time to review equipment and buildings. Seek out a replacement cost appraiser or forensic accountant to help identify (a) real and personal property values and (b) business interruption costs for various scenarios.

Determine capital expenditure plan for site improvements

Finally, underwriters have been asking for specifics regarding CapEx: What is the budget for future renovations, new construction, or other improvements that will help with fire and other loss mitigation?

Give yourself the best odds for the best terms

Nearly every egg producer will experience some hurt during the current market, both from increased costs and increased scrutiny from carriers. These four suggestions should put you in the best possible position for the near and long term.

If you have questions about these or other insurance topics, please reach out to the Palomar UEP Team at eggs@palomarins.com or directly to any of our team members:

Brett Cohrs: 770-709-7712 brettc@palomarins.com
Carolyn Grubaugh: 770-709-7713 carolyng@palomarins.com
Des Yawn: 770-709-7704 desy@palomarins.com
Evan Strother: 770-709-7715 evans@palomarins.com