Livestock farming is a primary source of income for most farmers and an intensive investment as farmers employ effort, time, and resources to nurture and protect their livestock.
Production uncertainties and unfavourable events like adverse weather patterns, market fluctuations and diseases lead to production losses that impact farm cash flow, profitability and sustainability.
These incidents lead to significant livestock losses making it difficult for a farmer to restore their farm. One of the effective ways for a farmer to secure their livestock is by taking livestock insurance.
What Is An Insurance Livestock Cover?
It is the amount of loss or liability covered by insurance to a farmer in case of an illness, theft or death of livestock.
The farmer is the insured (a person who buys a cover) and the insurance is the insurer (an entity or company that sells the cover).
A farmer buys the cover by paying a specified amount either daily, weekly, or monthly to an insurer known as a premium. The insurer pays a sum amount known as a benefit to the insured when a claim happens.
The farmer and the insurance company make a legal contract known as a policy. This policy contains a Declaration Page, Insuring Agreement, Exclusions, and Conditions.
The declaration page is the description of the cover. It entails the information of the insured, the type of livestock to be covered, the policy period and policy limits.
The Insuring agreement entails the promises made by the insurer to cover the loss.
Exclusions are perils that cannot be covered in that policy. Conditions are a set of regulations to be met for an insurer to pay for the benefit.
It is advisable as an insured to read and understand the policy before buying the cover this will prevent problems and disagreements with your insurer during the event of a loss.
Consult on the best livestock insurance covers from experts and farmers that best suit your farm.
So, Why Get An Insurance Livestock Cover?
As you have now understood what is a policy, let’s delve into the importance of taking insurance coverage.
Safeguard Against Unforeseen Events
First is to safeguard against any unforeseen events that might happen to your livestock in the future such as illness, death, drought, pests, diseases and theft. The livestock insurance will compensate for these losses and enable the farmer to be on track with his daily farm operations.
Builds Security for New Technology Implementation
Since insurance covers offer security, the farmer is more likely to adopt technology, new measures and breeds without the fear of losing.
Some insurance companies have developed farming infrastructure and production prediction frameworks that help farmers make smart decisions. For example, the use of risk forecasting programs availed to clients helps them implement technology or measures that reduce the impact of the risk.
Provides Financial Security
The farmer has easy access to financial aid such as credit or loans to fund their livestock.
Since your farm is insured its financial future is protected, lending institutions are ready to offer credit services in the event of a loss then the amount can be covered by the insurance company.
Promotes Financial Stability
The livestock insurance provides a lump sum or a stream of payment during the event of a loss. This helps the farmer to gain income stability during risk occurrences and to get back on track in farm production.
Foster Generational Wealth
Insurance coverage promotes long-term sustainability since the farmers are able to employ sustainable methods for preserving the environment and animal welfare. The durability of maintaining the farm will lay a great foundation for future generations to continue farming the land.
Livestock farming is inherently risky due to unpredictable production patterns and farming risks. Livestock insurance provides a haven for prosperous and sustainable farming.
Livestock insurance provides financial protection, stability, ability to innovate, and builds farmers’ confidence to make smart decisions by offering a cover in case of risk occurrences.
It is worth investing in livestock insurance rather than facing uncertainty unguarded to safeguard your farm’s future.