Farm operations face pressure from several directions at once. Beyond the ongoing challenges of input costs, labor and succession planning, five trends are reshaping the risk landscape. In a recent conversation with farm CPA Paul Neiffer on the Top Producer Podcast, Emily Berrier, SVP and chief underwriting officer at Farm Family, shared what she is seeing across farm operations.
- Casualty losses are growing at 11% a year. Over the past five years, US commercial casualty insurance losses grew at an average annual rate of 11%, according to Swiss Re. Social inflation – rising jury awards, litigation funding and shifting public attitudes – is a significant driver.
- Reconstruction costs are outpacing property coverage. According to Verisk, national commercial reconstruction costs increased nearly 44% between 2019 and 2024. Even as broader inflation has moderated, reconstruction costs continue to trend upward across the country. Farm owners who have not updated property values risk being underinsured at the time of a loss.
- Severe weather is increasing in frequency and cost. Changing weather patterns and increasingly costly weather events are creating greater property exposures for farm operations. From flooding and derechos to wildfire, keeping coverage aligned with those exposures is critical.
- Evolving operations create exposures that are easy to miss. As farm owners diversify revenue streams, restructure into separate LLCs or expand services; new property and liability exposures can emerge. Moving semis and trailers into a new LLC, for example, can change licensing requirements, coverage costs and policy alignment in ways that are not always obvious. Involving an insurance agent and attorney before making structural changes can keep coverage, licensing and liability in sync as operations evolve.
- Connected farm technology introduces cyber risk. IoT sensors, monitoring systems, drones and autonomous equipment are becoming standard on modern operations. They reduce downtime and improve safety – nearly 70% of fatal barn fires are linked to electrical faults, according to the Animal Welfare Institute, and monitoring systems can help detect those issues early. But connected farm technology also introduces cyber liability – an exposure many operations have not yet addressed.
What proactive operations do differently
The most successful operations Berrier sees treat risk management as part of running the business, not a reaction to a loss.
- Keep up with maintenance and monitor your fleet
- Establish and follow safety procedures
- Review coverage as your operation evolves
- Involve your insurance agent in business structure decisions
- Consider cyber liability coverage for connected farm technology
As Berrier said, farm operations will continue to evolve. The coverage behind them should, too.
Watch or listen to the full interview to hear Berrier discuss these trends in more detail.
