Protecting your business requires more than simply writing an insurance check for property and casualty coverage each year at renewal time.

Listen to someone who faced the ultimate insurance test: Last June, a fire destroyed Rio Queen Citrus Inc.’s 130,000-square-foot packinghouse in Mission, Texas. The rebuilt facility started full operations earlier this year, says company president Mike Martin.

After the fire, Martin discovered one bright spot. “Our insurance was very well put together,” he says.

The experience emphasized the importance of thoroughly reviewing coverage every year, he says. Start 45 to 60 days before your renewal date and sit down with your current agent as well as one or two others who handle commercial agriculture.

“They all have different ideas and different approaches,” he says, noting that no single approach fits everyone equally. “Make sure you’re getting the right ideas for your business.”

Different types of coverage

Insurance professionals echoed that advice and urged growers and packers to contact agents whenever they make any changes that affect their coverage, such as buying or selling equipment and other property.

“There’s nothing worse than to have a client call with a claim and discover they’re not covered,” says Brad Risenmay, vice president of Sloan-Levitt Insurance in Othello, Wash.

Blanket coverage insures property loss up to a set value, but tractors and other equipment may exceed that limit and should be listed separately. At the same time, don’t pay for coverage you no longer need, he says.

Rio Queen operates in several locations. Rather than insure each building separately, the company opted for blanket coverage that more than covered replacing a single building.

“That was brilliant,” Martin says. “You never think of everything you’d need to replace.” The higher limit absorbed those unexpected costs.

An experienced agent should ask the right questions, but double-check whenever you’re uncertain, says Bill Avakian, an agent with Avakian Insurance in Fresno, Calif. One example from a rash of metal thefts is that well pumps—damaged and stripped of valuable copper fittings—may not be automatically covered.

“You want to catch things before they fall through the cracks,” Risenmay says.

During a review, one longtime customer referred in passing to racehorses he owned—property that had never surfaced in previous discussions and that wasn’t automatically covered under his policy. Compounding the problem, the customer also transported racehorses for others, he says.

“That could have been an exposure that could have cost him his farm,” Risenmay says.

Reviews also help match policy limits to increases in replacement costs and inventory values, says Kenneth Hake, commercial underwriting director for Nationwide Agribusiness Insurance in California and Nevada, based in Sacramento, Calif.

Construction booms and oil price jumps have pushed building costs beyond automatic inflation guards incorporated in customer policies, Hake says. Commodity prices also have swung wildly, not only for stored crops that could be lost along with a building, but also for stocks of pesticides and fertilizers.

Coverage for new ventures

Because businesses evolve over time, check that your coverage addresses any new ventures, Risenmay says. Examples include adding a farm stand or U-pick operation, or expanding into packing and shipping.

Sending trucks onto the road, selling food for consumption or allowing people onto your property all open doors to potential liability claims, Hake says.

Set policy limits high enough to cover such possibilities. One big claim could exhaust your coverage and leave you personally vulnerable, Avakian says.

Develop a contingency plan

After a loss, replacing buildings, equipment and inventory isn’t your only concern. Continuing to operate in the interim is even more important.

“The customer still needs product, and you don’t want them to go elsewhere,” Hake says.

Business income and extra expense coverage offsets lost income, helps you stay current with operating expenses and maintains employee payrolls. “That’s an overlooked coverage,” Risenmay says.

Not for Rio Queen, Martin says. Such coverage helped fill the gap, though the company also was able to move interrupted packing operations to double shifts at its second Texas site.

Not all businesses have that option, Hake says. Setting up written reciprocal agreements with others in the industry is part of crucial contingency planning. Spell out details of how the arrangement will work and how all parties are protected.

Other types of coverage to consider include employee liability and disability policies, Risenmay says. A liability policy can include protection from sexual harassment suits, while a disability policy provides stopgap coverage above worker’s compensation limits.

For partnerships or any operation where employees have critical expertise, a “key man” policy might be useful to buy out a partner’s survivors or replace key people, he says.

Protect against technology headaches

New technology can create insurance headaches, Hake says. Consider coverage against breakdowns of important equipment or hot-testing new additions. And innovators may want intellectual property coverage to protect against others poaching their developments—as well as defending themselves against infringement claims.

Not all insurance requires buying a policy. Developing contingency plans and spreading them among key people will help you manage any crisis more smoothly, he says.

“Write everything down and back it up off-site and frequently,” Hake says.

Rio Queen dodged one major loss by maintaining data backups outside the destroyed packinghouse. The company also had just moved computer servers into a new office building, Martin says.

“Now we’re going to keep backups in all three buildings [on the site] and we’re looking at some off-site storage for critical data,” he says.

But the main lesson from the fire is to find the right agent to trust with your business, Martin says. “Insurance is a piece of paper and a promise to pay. It’s only as good as the company behind it.”

Contact The Grower at or (209) 571-0414.