Insurance for Agribusinesses
Liability insurance is a key part of commercial insurance for your agribusiness. Without enough liability insurance, your food or beverage processing business could face financially damaging lawsuits.
Agribusinesses need to have their commercial insurance customized for all potential liabilities as part of their risk management strategy.
What companies needs agribusiness insurance?
- Beverage manufacturing
- Bakeries and tortilla manufacturing
- Meat product manufacturing
- Beverage manufacturing
- Sugar and confectionery product manufacturing
- Fruit and vegetable preserving and specialty food
- Dairy products manufacturing
- Grain & oilseed milling
- Seafood product preparation and packaging
- Animal food manufacturing
- Hemp food products manufacturers
- Agri-food research centres
Why is business liability insurance part of your risk management strategy?
You’ll need to choose business liability insurance coverage that identifies and manages the risks you face in the agricultural food sector. Your goal would be to minimize any negative financial consequences as a result of lawsuits.
Examples of potential risks that your food and beverage manufacturing business can face include errors and omissions in your work, product issues, security breaches and cyberattacks, and severe weather.
Consider these liability insurance coverages for your food or beverage processing business:
Product liability insurance
Product liability insurance protects agribusiness companies against claims alleging third-party property damage or bodily injury caused by a product you manufacture, distribute, or sell.
Product liability protects your agribusiness should one of your products harm a customer, even if you’re not at fault or it wasn’t your intention.
Product liability insurance covers:
- Design defects: There’s something wrong with the product’s design.
- Manufacturing defects: Something went wrong during manufacturing.
- Marketing missteps: A mistake in marketing materials, such as improper labels.
- Insufficient warnings: The product doesn’t include sufficient warning/information about potential harm.
Consider product recall insurance
This type of coverage helps agri-businesses recoup the cost of recalling products due to a defect, whether that recall is voluntary or involuntary. Product recall insurance helps cover your shipping, warehousing, disposal, and restocking costs.
Commercial general liability (CGL) insurance
If you were sued, commercial general liability insurance would cover the legal costs to defend the claim against your agricultural company in court, as well as costs to cover damages to compensate third parties whether you win or lose your case.
What kind of risks does commercial general liability insurance cover?
- Injury to a third party who is not your employee
- Damage to someone’s property
- Damage to rented property
- Medical bills if someone is injured
- Legal costs and settlement costs of liability lawsuits filed against you
- Liability lawsuits related to slander and libel
Cyber liability insurance
If you keep client data and their payments information, your agribusiness could be hacked by cyberthieves. Cyber liability insurance will help financially protect your food or beverage processing company should there be a cyber-attack.
Depending on the size of the data breach and the information that was taken, the customers who are affected can hold you liable and sue your agri-company for damages.
Professional liability insurance
Professional liability insurance helps protect agribusinesses when there are claims of negligence when they are performing their duties. It’s also called errors and omissions insurance.
A client could sue you for negligence, mistakes, omissions, or failing to deliver a service as promised that causes them to suffer a financial loss. For example, if a food product you produce for them fails to meet their specifications or is not delivered on time.
Directors and Officers liability insurance
Does your agribusiness have a board of directors? Directors and officers insurance provides financial coverage for legal expenses to help defend a board member or officer against legal claims. It typically covers misleading statements, reporting issues, and inaccurate disclosure.
Directors and Officers insurance also covers:
- Negligent acts and allegations of misrepresentation
- Breach of legal or fiduciary duties
- Decisions that result in adverse financial consequences for shareholders
- Wrongful dismissal and employee discrimination claims
- Failure to adhere to federal and provincial laws and regulations
Commercial umbrella insurance
You may want to consider commercial umbrella insurance for your food or beverage company. Commercial umbrella insurance addresses liability coverage gaps. It’s used when the primary liability coverage, for example on your commercial general liability insurance, has reached its coverage limit.
The protection that umbrella insurance provides applies only to expenses related to liability such as legal fees, court fees, and legal settlements.
What other insurance do agribusinesses need?
Commercial property insurance
Commercial property insurance provides financial support to replace or cover repairs to your agribusiness if it is damaged by a flood, fire, or severe weather. It also covers vandalism and theft.
Commercial property insurance also covers contents such as computers, furniture, tools, equipment, and inventory. Commercial property coverage also extends to protect others’ property that is under your care.
Business interruption insurance
This type of insurance supports you when your agri-sector business cannot operate due to a covered loss.
There are a number of losses that could force your agribusiness to shut down. Some examples are:
- Damage to your equipment from fire or vandalism
- A major reduction in revenue due to a client/supplier facing losses of their own
- A disruption in your supply chain
Business interruption insurance can help with these expenses:
- Payroll
- Rent
- Utilities
- Property taxes
- Alarm monitoring
- Relocation of your business
Equipment breakdown insurance
Equipment breakdown insurance covers machinery from costs associated with sudden or accidental breakdown of electronic or mechanical machinery.
Commercial auto insurance
If you are using your car for your job in the agribusiness sector, for example for delivery or sales, it won’t be covered by your personal car insurance policy. You will need commercial coverage as part of your insurance package. If you have five or more vehicles for your agribusiness, you will need fleet insurance.
How much does agribusiness insurance cost?
These factors are typically used to calculate your business insurance:
- Location(s)
- Services provided
- Number of employees
- Years of experience
- Annual revenue
- Any past claims
