Providing you have a policy in place, and you’ve ticked all the right boxes in terms of legalities, it can be all too easy to forget about the importance of a good insurance policy.
Until something goes wrong, that is. Then you’ll be wishing you paid a bit more attention.
If you have a smallholding or you’re planning on buying some land, you need to make sure you find the right insurance policy to cover you. But knowing where to start can be the tricky part.
You won’t be covered by commonplace house or contents insurance. Instead, you need to find an insurer that will create a tailored policy for your small holding.
To help you do this, we’ve created this beginner’s guide to smallholder insurance, complete with some key points for comparing and securing the best possible policy.
The definition of a small holding
A smallholding is generally understood to be a piece of land that is smaller than your average farm but is used for similar purposes. However, this is more about a lifestyle and being self-sufficient rather than running a commercial farm.
When it comes to insurance, the definition of a small holding will vary depending on the insurance provider, so you need to be aware of this. Some insurers will limit the size of your smallholding, and for most policies, your land cannot be bigger than 50 acres. However, some providers do allow up to 100 acres of land, depending on the activities you will be performing there.
In many cases, small holdings will be used for rearing livestock or growing crops, and any other activities after this should be considered secondary activities. This could be ways of making a little money on the side, for example, running a bed and breakfast, keeping horses or making (and selling) products like butter and jam.
Many smallholding insurance policies will cover you automatically for livestock and crops, but you may need to check what else is covered if you plan to make additional income using your small holding in this way.
What is smallholding insurance?
As there are lots of different areas and items on your smallholding that will need protecting, your insurance policy must cover all of these different aspects. As such, smallholding insurance is not a single policy but rather a combination of different policies that cover these different areas in one package. This makes it easier to understand, but it is also why it’s so important to check what is and isn’t covered within your package.
What’s included in smallholding insurance packages?
In order to further understand smallholding insurance, we’ll now look at the different aspects that make up these combination policies. The different areas are:
Agricultural vehicle insurance
No matter what type of agricultural activities you plan to carry out on your smallholding, you need to make sure you cover any agricultural vehicles, such as tractors, off-road vehicles, etc. This is especially important as these vehicles can be expensive to buy and repair if something goes wrong.
Livestock and farm animals insurance
If you’re going to have animals on your land, you need to protect them. In most cases, livestock policies will cover sheep and cows, so you’ll have to check if you’re covered if you intend to have other animals as part of your flock.
Again, livestock isn’t cheap to buy, and as there are a series of risks facing these animals, you need to make sure that you’re covering your investments. It’s best to look for a policy that covers your livestock for the following:
- Environmental issues
- Injury and death in transit
- Injury or death when straying from the small holding
- Disease or illness
Just be aware that some insurance providers will put limits on the value of each single animal. This might range from £1,000 to £5,000, but be careful to know their value, and you can determine whether you’ll be able to cover your costs should something happen.
You might have just one personal property on your smallholding, or you might have several buildings. Either way, you need to make sure that you protect all properties from eventualities such as fire, theft, storm or environmental damage and vandalism.
Some smallholding insurance providers will offer comprehensive property policies that cover contents too. This might include machinery and produce, as well as any personal belongings stored within your properties or farm buildings.
Either way, it’s important to look for a property policy that will cover everything you need or invest in separate contents insurance if need be. You can always ask providers to tailor your policy further to ensure all your belongings are also safe from the perils we’ve listed above.
There are some liability insurance considerations you need to make, the first being public liability. Ideally, you want a policy that covers both public and product liability. This will protect you from the following:
- Damage to other people’s property caused by your activities
- Injury and death on your smallholding
- Damage or illness as a result of products you sell from your smallholding
It’s worth knowing that there are often limits put on these insurance policies though many will offer a minimum of £1 million in cover should someone make a claim against you.
You might also need to consider employer liability insurance if you plan to hire others to work on your smallholding for you. This isn’t necessary if it is just your family working the land. However, if you plan to have employees, even just casual ones, then this is a legal requirement.
After all, you need to protect yourself and them should they get injured or ill as a result of the work they are doing for you.
Finally, environmental legislation has been growing and becoming more complex in recent years, and you need to make sure you’re covered for your environmental liability. Be sure that your policy includes ‘environmental liability’ for a range of scenarios and does not just the word ‘pollution’ vaguely in the description.
For example, you might need to protect yourself if you accidentally damage the environment around you. You might also have protected flora or fauna on your land that needs extra special attention.