By Tracy Hawker and Joshua Smart

The use of on-site storage bins can be a godsend to farmers, if for no other reason than as a place to park their harvested crops as they wait out slumping commodity prices for more advantageous ones. They enable improved efficiencies, too, whether in costs and transport time to grain elevators or avoiding the long lines at elevators during the busy harvest season.

But it’s important to be aware of how some storage of crop practices may actually increase risk and inadvertently create challenges in obtaining the right insurance. The bins have the same exposures of fire and mold, for example, as other farm buildings and property. And growers who group siloes on unfarmed acreage – concentrating valuable commodities in one location – may find it difficult to find insurance carriers to cover them. Another issue is the potential breakdown of the storage bins’ mechanics, jeopardizing your hard work and investment.  

Other risks are posed by how the commodity is handled as it’s put into storage. If grains are harvested during a stormy season, for example, there’s a risk of mildew. Tubers may look fine after an unexpected freeze, but may break down after they’ve been stored for a while. And don’t forget combustion exposures when dealing with hay, which can self-ignite in storage.

Understanding the risks associated with your storage of crop practices can help identify the best strategy for procuring the right insurance policies, including:

  • Federal crop insurance is the standard for protecting crops against natural perils like hail and fire during the growing season and for a certain length of time afterward. Most policies provide coverage for up to 20 days after the crop is harvested for field-borne issues. An endorsement to the policy will cover the harvest for up to 60 days in storage for issues that might be manifested further out. 

  • For crops that will be stored longer than 60 days, commodity insurance should be added to the general farm policy. This should be accompanied by an endorsement for mechanical breakdowns to the storage bins – for example, if the cooling system fails – that typically covers some $250,000 in damages.

  • For some types of commodities – think apples and pears and other tree fruits (organic and not)– stock throughput coverage is sometimes written. This is an open risk, all-peril coverage that is applicable to perishable and non-perishable commodities, when they are being shipped or stored, then shipped again. When it fits the particular crop situation, combining stock throughput with equipment breakdown coverage ensures sufficient protection for the grower. 

And, while deductibles are a big pain point – and understandably so – there are options to increase premium levels to keep deductibles manageable.  

HUB International’s consultants are available to work with you in trends and developments that may impact your risk posture today and in the future.