2013 MO Pork Expo

Worked in the insurance industry for the last 14 years, specializing in CAFO related risks.

Active member of ◦ Independent Insurance Agents of Nebraska◦ Platte Insurance Board◦ Patriot Guard◦ Eagles◦ Elks

An avid hunter & fisherman

Live in Columbus NE with my wife Lisa and four children. (Jackson, Grant, Taylor & Madison)

Has specialized in insuring Concentrated Animal Feeding Operations across the Midwest since 1981. Currently active in about 15 different states. From North Dakota down to Texas & Colorado over to Ohio

Represent A rated carriers

Offices in Nebraska & Iowa

Blanket

Co Insurance

Cause of Loss◦ Basic◦ Broad◦ Special

Replacement Cost vs. Actual Cash Value

Inflation Guard

Blanket coverage will lump property values together so you have the total amount for any one loss.

Some companies will blanket by each individual insured location and others will blanket all insured locations together.

No Blanket Coverage

You would have the total of $600,000 that you had the barn insured for.

Since there are two barns at this location the

company would lump those values

together so you would have a total

of $1,2000,000.

All buildings at all locations would be added together and you would have a

total of all the buildings.

$2,400,000

Blanket By Location

Blanket All Locations

Most building and business personal property policies have a coinsurance clause which requires the insured to carry insurance equal to at least a specified percentage of the replacement cost value of the property. If a loss occurs, and it is determined that the amount of insurance carried is less then the amount required a penalty could be placed on the insured.

Example 1 Example 2

The replacement cost of a barn is $500,000. If the policy has an 80 % Co Insurance Clause, thebuilding needs to be insured for at least $400,000 to avoid a coinsurance penalty.

$500,000 X .80 = $400K

The replacement cost of a barn is $1,000,000. The policy is written on 100% Coinsurance, but the building is only insured for $900,000. In this situation the insured would be hit with a coinsurance penalty for the $100,000 that they are underinsured.

Basic property insurance policies are written to cover the perils of:

Fire, Lightning, Windstorm, Hail, Explosion,

Vandalism, Smoke, Sprinkler Leakage, Aircraft or Vehicle Damage,

Riot or Civil Commotion,Sinkhole Collapse, &

Volcanic Action

Broad Cause of Loss will also include the following perils on top of the Basic perils:

Collapse due to the weight of ice, snow, or sleet

Breakage of Glass, Water Damage, &Falling Objects

The Broadest coverage is the special form, which is best known as the all risk form. All risk covers all causes of loss, except those specifically excluded from coverage.

A couple of examples of excluded perils would be flood & earthquake.

It is possible for a commercial property policy to have more than one cause of loss form.

Property can be valued in several different ways. Insurance companies commonly use two approaches to determine value, which also determines how a loss will be paid; the replacement cost method and the actual cash value method.

Insures consider Replacement Cost of a property item to be the cost to replace it with new property of like kind.

Actual Cash Value is the replacement cost minus the accumulated depreciation for age and condition.

Replacement Cost Example Actual Cash Value Example

The company would replace your roof with like kind. Minus your deductible.

$100,000 - $5,000(Ded)= $95,000

Since half of the life expectancy is used up the company would deprecate your roof by 50%. Minus your deductible.

$100,000 X 50% = $50,000 - $5,000(Ded) = $45,000

An insured can insure a building for its full value at the beginning of the policy year, but, by the end of that year, it might not be covered for it’s full value. This problem can be corrected by adding inflation guard coverage. With inflation guard, the policy limit increases at the end of the term by 3%.

Occurrence Form vs. Claims Made Form

General Aggregate / Occurrence Limit

Products / Completed Operations

Medical Payments

Pollution Liability Endorsement

CCC Endorsement

Umbrella

A policy is usually written on two main forms, Occurrence & Claims Made.

For a claim to be covered under an Occurrence form that claim needed to take place during the policy period.

For a claim to be covered under a Claims Made form the claim needed to have taken place and turned in during the policy period.

Occurrence Claims Made

In this particular example the claim would be covered under an occurrence policy since it happened during the policy period. The claim does not need to be turned in during that policy period.

Even though the claim happened during the policy period there is no coverage, since the claim wasn’t turned in during that policy period.

General Aggregate Limit Occurrence Limit

General Aggregate Limit is the total amount the company will pay out during the policy period

Occurrence LimitIs the total amount the company will pay out for any one claim

Products Coverage - is provided for damages arising out of products manufactured, sold, handled or distributed by the insured.

Completed Operations - covers damages occurring after operations have been completed or abandoned, or after an item is installed or built and released for it’s intended purpose.

Medical Payments Coverage pays medical expenses resulting from bodily injury caused by an accident on premises owned or rented by the insured, or locations next to such property, or when caused by the insured’s operations. These payments are made without regard to the liability of the insured.

This endorsement redefines that animal waste is not considered a pollutant under the GL.

This endorsement removes the Care, Custody & Control Exclusion under your liability policy. It provides defense coverage in the event of a lawsuit claiming negligence which result in the death or destruction of livestock in your Care, Custody, or Control. This coverage is written on a named peril basis, with a policy limit of $1,000,000.

Provides additional liability coverage over the underlining liability, auto, & employers liability. Usually written in million dollar increments up to 5 Million in coverage.

* We will not write in excess of our pollution liability endorsement.

Farm Employers Liability vs. Workers Compensation

Builders Risk

Earthquake

Flood

Terrorism

Business Income / Extra Expense

Livestock Transit

BI Utility Service Interruption

Appearance Damage Wavier

M&E Breakdown

Farm Employers Liability – provides minimal coverage for injured employees.

Workers Comp – is more broad than FEL. It will provide cash benefits and medical care if an employee becomes disabled because of an injury or illness related to the job.

Provides coverage for the structures while they are under construction. This endorsement will also give you coverage for theft of building materials.

Extends your cause of loss to include damage that results directly from an earthquake. Coverage is provided for replacement of buildings only. All earthquake shocks that occur within a 160 hour period (one week) are considered to be a single occurrence. A separate deductible applies and is determined by the value of the insured property.

Flood Insurance is covered under a separate policy underwritten by the federal government.

Provides coverage for a Certified Act of Terrorism

Certified Act of Terrorism – an act of terrorism that must cause losses in excess of 5 million dollars. It must have been committed by an individual or individuals acting on behalf of any foreign persons or foreign interest to coerce the government or populations of the United States.

Business Income pays the actual loss of business income sustained by the insured because of a necessary suspension of the insured’s operation during the period of restoration following a loss.

This endorsement adds the peril of Transit onto the policy.

Provides business income and extra expense coverage due to utility service interruption.

Changes policy wording to state that coverage does not apply to appearance or cosmetic loss or damage to the metal roofing material caused by or resulting from windstorm or hail.

* A 10% credit is applied to the property section.

Adds the following perils to the policy:

Mechanical Breakdown Electrical Arcing &

Steam Explosion

Informational statements regarding insurance coverage are for general description purposes only. These statements do

not amend, modify or supplement any insurance policy. Consult the actual policy or your agent for details regarding terms, conditions, coverage, exclusions, products, services

and programs which may be available to you. Your eligibility for particular products and services is subject to the final

determination of underwriting qualifications and acceptance by the insurance underwriting company providing such

products or services.