Agricultural contacting plays a key role in farming across the UK, allowing farmers to carry out crucial work without having to invest in expensive machinery or skills training. Nearly £500m of agricultural hire work was carried out back in 2011 and the majority of farms are involved in contracting either as purchasers or providers*. In carrying out these vital services, you want to make sure your contracting business is covered.
What areas of cover should I think about?
If you’re an agricultural contractor, having the right liability insurance is essential. The areas of cover you should think about are:
- Public and product liability – to cover any claims arising out of your work or as a result of injury to others
- Employer’s liability – in case any of your employees sustain an injury at work that results in a claim against you
- Tools and materials – in the event of theft or damage
- Legal expenses – advice around tax and debt as well as cover for any legal costs
What is the importance of Public Liability cover?
Public liability insurance pays any legal costs and compensation payments that you or your company could be liable for as a result of injury or damage to another person’s property. It’s not required by law but considering you will often be undertaking work on someone else’s farm and are likely to have tools and other equipment out that others could injure themselves on then it would be prudent to cover yourself in the event of an accident.
Do I need Employer’s Liability insurance?
If you employ one or more than one person you will need this cover by law. Labour-only sub-contractors (LOSCs) may be common in building trades but if you are providing tools and the method of work then even if you are not deducting tax and national insurance LOSCs could be classed as employees in the eyes of the court.
On the other hand, bona fide sub-contractors (BFSCs) are those who work without direction from you, generally have their own tools and usually hold their own insurance.
What is JCT cover and do I need it?
JCT Clauses 21.2.1 or 6.5.1 can be found in the JCT Standard Form of Building Contracts. They require that insurance be arranged in joint names of the employer and the contractor. This cover protects the employer in relation to their legal liability where loss or damage is caused to adjacent or surrounding property.
JCT cover tends to be required for larger and more complex projects so if you undertake this kind of work you should look into this cover.
What sorts of agricultural trades will be covered?
This insurance can cover a variety of agricultural trades including baling, fencing, harvesting, picking, lambing, spaying and combining. It is also understood that many agricultural contractors have more than one trade so you can also get cover if you undertake plumbing, building, electrics and similar activities. You can get cover for more than one trade and the more detail you provide about your different activities and the percentage of time you spend on each, the more likely you are to get a competitive quote as the insurer will have a good picture of your risk profile.
How is the cost of my cover worked out?
The price you pay for your agricultural contractor liability insurance will depend on a few key things. What you do, where you do it and how much you do is really important, especially given the diverse nature of agricultural contracting. This will be coupled with information about the level of cover you want and any previous claims you’ve made.
Rural Insurance has teamed up with Zenith Marque to offer Agricultural Contractor insurance with cover for your works, tools, personal effects as well as employer, public and product liabilities. Find out more or speak with your local broker today to get a quote.
*Source: https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/370275/agrianalysis-contracting-04nov14.pdf