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WHY YOUR FINANCIAL PORTFOLIO NEEDS Agricultural Insurance
Agricultural Insurance
In general, insurance is a technique for managing risks that is intended to protect against potential losses. According to the traditional definition, risk of loss is fairly transferred from one entity to another in exchange for a premium or a guaranteed, quantified little loss in order to avoid a much larger and potentially catastrophic loss.
A unique type of property insurance specifically for agricultural businesses is known as agriculture insurance. Because this sort of insurance is so specialist, the insurance companies that operate in the market either have agribusiness departments that are exclusively responsible for it or outsource the underwriting to firms who are experts in it. In addition to crop insurance, agricultural insurance covers forestry, aquaculture, greenhouses, livestock, and bloodstock.
Benefits of agricultural insurance
The losses farmers endure as a result of natural disasters like floods, droughts, and pest and disease outbreaks can be significantly reduced with the help of agricultural insurance. Additionally, agriculture insurance offers the advantages listed below:
- It makes it possible for farmers to get credit and finance for investments in cutting-edge tools, equipment, and technology that will increase and sustain their level of productivity.
- Additionally, it helps farmers manage their cash flows and offers a financial safety net to help them repair their damaged businesses.
- Risk to the company is decreased. In agricultural operations, tools and property are used, and because human error is involved, it is possible for this to happen quickly. These kinds of hazards are lessened by agricultural insurance.
- Peace of mind is given to the farmers by it. Agricultural insurance alleviates the anxieties, tensions, fears, and worries farmers may experience when farming, allowing them to focus more on growing their businesses and less on their issues.
- By requiring consistent premium payments that cannot be easily withdrawn prior to the policy’s expiration, it promotes saving.
- Credit facilities are offered. A farmer may be able to get loans using an insurance policy as collateral, provided that the interest levied on those loans does not exceed the insurer’s cash value premiums.
- By collecting money from insured people and using it to make investments in the infrastructure and services required to expand the economy, it helps a nation’s economy grow more quickly.
- By capturing extra money in circulation in the form of premiums, it also serves to limit inflation brought on by an excess of money.
- The ability to prevent their employers from going out of business, which would result in workers or employees losing their jobs, also ensures the job security of employees.
Different types of agricultural insurance
There isn’t a single agriculture insurance that can provide protection for all varieties of farming operations. Different agriculture insurance policies are available to protect the various sorts of farming enterprises. Animal insurance, crop insurance, and farm property and equipment insurance are the three main categories of agricultural insurance, respectively.
Animal agricultural insurance is purchased by farmers who raise animals as a kind of insurance against the death of their cattle, fish, and birds as a result of disease outbreaks, accidents, and calamities like hail, drought, and floods.
Crop agricultural insurance is purchased by agricultural producers, such as farmers, ranchers, and others, to protect themselves from either the loss of their crops due to natural disasters, such as hail, drought, and floods, or the loss of revenue due to falls in the price of agricultural commodities. Crop insurance is divided into two main categories: crop yield insurance and crop revenue insurance.
Farm equipment and property agricultural insurance is bought by farmers and agro-related industries that process and package agricultural products. The property and tools used in farming and agriculture are protected by this insurance.
These general categories of agricultural insurance are further divided into specific coverage for the many farming activities farmers are engaged in. Following is a list of the several types of agricultural insurance policies that farmers can purchase in the Nigerian insurance market:
Fish Farm Agricultural Insurance
Your fish will be protected from perishing and your fish pond will be protected from collapsing due to direct damage from fire, lightning, windstorm damage, flooding, illness, and accidents under this agriculture insurance plan.
When you choose the standard coverage offered by this policy, you will be reimbursed for the cost of rebuilding your pond to its pre-loss or pre-damage condition as well as the worth of your fish in the event that they perish.
You may also acquire coverage extensions, subject to the payment of an additional premium. You will be compensated for 1) fish deaths in transportation and/or 2) hatchery reconstruction in the event of loss or damage, which is increased by an extension of the coverage you obtain. As stated in the policy, compensation is given up to the relevant restrictions.
Poultry Agricultural Insurance
With the help of this agricultural insurance policy, you may protect your flock of broilers, layers, parent stock, and hatchery stock against deaths directly brought on by fire, lightning, windstorm, flooding, illness, and accidents.
Your birds’ assessed value will be paid in the case of their death by the basic coverage offered by this insurance.
Livestock Agricultural Insurance
Your animals (such as cattle, sheep, goats, rabbits, and pigs) will be covered by this agricultural insurance plan against fatalities brought on by fire, lightning, windstorms, floods, accidents, pest and disease outbreaks, and other direct causes of death.
Your animal’s value will be paid to you in the event of a death under the terms of this policy’s standard coverage.
Also available are coverage extensions, which come with an additional fee. According to your policy’s specified restrictions, compensation is given up to that amount.
A Veterinary Health Certificate in the required format from a licensed veterinarian stating the age, identity marks, pictures, health, and market worth of the animal is required for this sort of agricultural insurance.
Farm Property and Produce Agricultural Insurance
This agricultural insurance coverage will protect your farm against loss or damage to agricultural produce as well as farm equipment and property that is directly attributable to fire, burglary/housebreaking, lightning, flood, windstorm, explosions, airplane accidents, impacts, and earthquakes.
You will be compensated under the basic coverage offered by this policy should the insured dangers cause damage to or destruction of your farm equipment or agricultural products.
You may also acquire coverage extensions, subject to the payment of an additional premium. You will be compensated for any loss or damage to your farm products while they are being transported thanks to an extension of your coverage. According to your policy’s specified restrictions, compensation is given up to that amount.
Multi-Peril Crop Agricultural Insurance
With the help of this agricultural insurance product, your farm will be protected from the dangers of actual crop loss or damage brought on by direct fire, lightning, wind, flood, pest infestation, and disease breakout.
This policy’s standard coverage will cover the costs of producing any crops that are destroyed or lost between the time of planting and the crop’s maturity.
Also available are coverage extensions, which come with an additional fee. You will be compensated for the market value of the crops that were lost or harmed during harvest if you obtain an extension, which enhances the amount of protection you receive.