Most farmers are aware of the loss they will suffer if their buildings are damaged or destroyed by fire, wind, or other perils. But what about the income they will lose because the buildings are gone or the extra expenses they will incur to keep their operations going?
SECURA’s optional Earnings & Extra Expense Coverage can help reduce the impact from this type of loss. This option covers necessary and reasonable costs for things such as:
- Moving livestock to a substitute facility
- Actual monetary income lost as a result of the destruction of a covered building
- Rental of substitute property to continue operations
To select an appropriate coverage limit, the best approach is to determine the maximum amount of Extra Expense & Earnings Coverage likely to be needed in any one month and then multiply this by the maximum number of months likely needed to replace destroyed buildings.
Note that the maximum recoverable in any one month is 1/3 of the total coverage, so at least three months of coverage should be purchased.
The policyholder must reduce loss under this option by:
Completely or partially resuming farming operations as soon as possible by:
- Using the covered buildings, whether damaged or not, and
- Using other property available to the insured.
Discontinuing “extra expense” by replacing or repairing damaged
property as soon as possible.
SECURA will pay no more than one-third the limit of liability if:
- The insured elects to discontinue use of the covered building(s), or
- The insured fails to make a good faith effort within 30 days of a loss to repair or replace the covered building(s).
Coverages described above are subject to all the terms and conditions of the policy, including deductibles, exclusions, and limits of liabillity. Please read your policy carefully |
