How one customer benefited from Business Interruption cover

Business Interruption cover secures the future of dairy calves in Devon.

Our customer farms 400 milking cows plus followers on a 300+ acre dairy farm in mid-Devon. They operate a closed herd, rearing all calves on the farm and keep them as milking cow replacements. Due to its location, the farm is currently under a TB2 Restriction order, which restricts the movement and sale of cattle.

In January 2017, a tipper lorry arrived at the farm to deliver a load of bedding sand. The lorry pulled up on the driveway  adjacent to the cattle shed and started to unload the sand. Due to a malfunction, the trailer broke apart from the lorry, falling sideways and colliding with a 6,500ft Dutch barn with lean-to buildings on either side. The barn suffered significant damage to its right hand side, and because it was a lean-to the whole building needed to be demolished and rebuilt. In addition the roof sheeting contained asbestos so posed a health and safety risk. At the time of the incident the barn was at full capacity housing 100 calves ranging from two to five months old. These calves were homebred and due to be reared and kept as replacement milking cows. With restrictions on movement the farmer needed to find a solution while the barn was rebuilt.

 

Alternative housing sourced

DEFRA confirmed that due to TB2 Movement Restrictions Order the farmer would not be able to move the calves off his holding through the winter. Working with our claims partner Agrical, our customer reviewed the options available to him. Fortunately our customer had opted for Business Interruption cover under his Farm Combined policy. This provided cover for the increased cost of working over a 12 month indemnity period. This enabled him to provide alternative housing for the calves in the form of igloos. At £5,000 each the farmer bought 5 igloos to accommodate up to 15 calves per igloo. Being insured enabled work to start straight away on the rebuild of the Dutch barn. The plan is once the building works have completed the igloos would be sold.

 

"Fortunately in this instance our customer took out Business Interruption insurance as part of their policy with us. This meant we were able to cover the cost of housing the calves through spring as well as the replacement of the damaged building in order to keep the business operating as usual"

Mark Jones, Rural Insurance Claims Manager

 

The importance of business interruption

Business Interruption insurance covers you for lost income during periods when you can’t carry out business as normal following an unexpected incident. Many businesses will insure for the physical assets such as buildings, livestock and machinery but it is important to consider the financial impacts in maintaining the running of your business.