Agricultural Contractor Insurance: What Do I Need?

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What is Insurance for Agricultural Contractors?

Whether you're a self employed or running a larger business, being an agricultural contractor is risky and you need insurance to protect against different types of risks.

Read our in-depth guide to learn about the different types of cover you might need, as well as typical costs. For quick definitions of each type of cover, see the blue boxes below. If you still have questions, fill out a quote form to get quotes from up to 5 providers.

Types of Insurance for an Agricultural Contractor

While insurance requirements may vary from contractor to contractor, here are some types of insurance that are typically popular with agricultural contractors.

Public Liability Insurance

If you have contact with people at work, public liability insurance protects against accidental injury or damage claims made by third parties.

Public Liability insurance will cover you for damages to a member of the public or their property. It can protect you financially against any compensation claims made for damages/injuries and the costs of your legal defence. The amount of coverage you receive usually comes in 4 bands: £1 million, £2 million, £5 million or £10 million (these are the typical amounts in the UK), which is simply the limit of the amount your coverage will pay out.

Public Liability is not compulsory by law, but it is especially important for agricultural contractors, seeing as you’ll often be working on other people’s land and properties, and your tools and equipment may end up being used by other contractors and farm workers.

Examples:

  • Bodily Injury Example: A fellow contractor trips and falls over a power cord you left exposed, making them unable to work for 4 weeks. They sue you for their lost income.
  • Property Damage Example: While driving a commercial farm vehicle, you drive through a pothole and damage it. The farm sues you for the cost of the repairs.

Employers’ Liability Insurance

Employers' Liability insurance protects against illness or injury claims made by employees.

Employers' Liability insurance is a legal requirement if you employ any workers, whether full-time or part-time. If one of your employees is injured or falls ill as a result of working for you, you may be at risk of the expense of the damages and any legal costs. Employers’ Liability covers your legal costs and any settlements from claims.

You’ll need Employers’ Liability if you hire or employ anybody in return for payment, even if they’re a family friend that you pay cash-in-hand, so don’t risk working while not covered properly.

  • Employers' Liability Example: An employee injures his back while moving heavy equipment in a shed. They claim the accident was your fault and sue you for damages.

Professional Indemnity Insurance

Professional indemnity insurance protects against claims made by clients that your advice or service was negligent.

Professional Indemnity insurance will protect you in the event that a client is unhappy with the work you’ve done. This could be as a result of a legitimate error, an issue with equipment, or perhaps they are simply not happy with the outcome of your work.

  • Professional Indemnity Example: A farm hires your company to help them plough their fields, however due to a faulty piece of equipment you used the farm claims you didn’t deliver the quality you promised. They sue you for the cost of reploughing the field and claim back the original payment they made to you.

Tools/Equipment Insurance

Tools cover can protect your equipment against loss, damage or theft.

Equally important to those who own their equipment and those who rent, tools/equipment cover will protect you against the cost of any damages or theft to any of your equipment, whether it is yours or you’re just borrowing it. Agricultural equipment can be very expensive, so it’s worth considering whether or not you or your company could afford them to be damaged or stolen.

Different types of tool/equipment cover will protect you for different situations, such as for damages while in transit or while away from your home (for example, parked in a public car park with your tools inside), so make sure you’ve thought about what would work best for you.

  • Tools/Equipment Example: While parked on your drive, your van is broken into and all of your equipment is stolen. You’re covered for the full value of the goods taken as your policy is of greater value than the lost goods.

Personal Accident/Injury Insurance

Personal accident insurance can provide money if you're off work due to a job-related injury.

Personal Accident or Injury insurance can provide financial protection to you or an employee if a work-related injury prevents you from working. As this type of cover is a “benefit”, it isn’t tax deductible, and pays out as either a weekly amount, in the case of a temporary injury, such as a broken foot, or a lump sum, in the case of a permanent injury/disability, such as the loss of an eye.

  • Personal Accident Example: While operating a piece of machinery, you’re injured and hurt your back, leaving you unable to work for 2 weeks. As you’re not working, you don’t receive any pay for the 2 weeks. Your Personal Accident coverage pays you a weekly benefit to keep you protected financially.

In addition, you may want to consider other types of business insurance such as legal expenses cover.

Do Agricultural Contractors Need Insurance?

Yes, agricultural contractors do typically need insurance. While it is certainly an additional annual cost for agricultural contractors, the value of damages that can be caused by farm tools and machinery, to either yourself, your employees, other farm workers or the general public means it’s worth making sure you’re fully protected to work. The average public liability settlement last year was £13,500 in the UK, so consider if you can really afford to work without appropriate protection.

The specific types of insurance you require, and the amount of coverage you need, will vary depending on a number of factors, such as if you typically work with your own tools (or simply use those provided to you directly by the farm) or whether you’re self-employed, an employer or an employee. If you are working as an employee, it’ll be worth checking what you’re covered for by your employer’s policies.

Most farms will not hire contractors or companies if they do not have an appropriate level of Public Liability insurance, so you’ll want to have this prepared before even applying for any jobs. Employers’ Liability is a legal requirement by any company that hires employees or contractors (even part-time), so if you’re employing anybody else to work with you ensure you’ve got this sorted.

If you’re supplying or renting your own tools, Tools/Equipment cover will make sure you’re protected for their cost, allowing you to quickly bounce back in the case of accidental damage or theft—however this will be less relevant for any agricultural contractors who mostly use the tools they’re provided with by the farm.

Professional Indemnity may also be of value for some, especially those involved in any designing or planning, such as inventory management or livestock planning, in the case that somebody isn’t satisfied with the work you’ve done in the case of an error or misunderstanding.

How much is Public Liability Insurance for an Agricultural Contractor?

The average cost of public liability insurance for an agricultural contractor starts at around £138 for £2,000,000 of cover. This is considerably higher than the average cost of sole trader public liability insurance in the UK—given the work agricultural contractors do, however, this should be unsurprising (more in our FAQs).

How does increased public liability impact costs?

As you can see below, there are some fairly obvious ways that your coverage may increase or decrease. Firstly, the more coverage you opt for, the more it’s going to cost—the cost packages are designed to encourage higher levels of coverage, however, so consider the extra roughly £9 per month for an additional £3M of public liability cover (from £2M to £5M).

How does where I keep my tools impact my insurance costs?

Where you keep your tools overnight can also increase the cost of your policy considerably. You could save nearly £80 per month on £2,000 worth of tool coverage simply by keeping your tools in a secure location and not in your vehicle overnight. Make sure you’ve also got a good idea of the total value of your tools to make sure you’re accurately covered, as your insurance won’t cover for costs above the amount you're protected for.

What impact do legal expenses/personal accident coverage impact my insurance costs?

Similarly, adding on additional protections, such as personal accident or legal expenses (quoted at around £5.56 per month) will increase your costs. You can see below that adding on personal accident coverage to your £2M of public liability increases the cost by around £90 per month, but do consider the potential implications of not having this protection in the case of an injury or accident.

What are the insurance costs of hiring employees as an agricultural contractor business?

On top of the additional risks of having an employee (twice the number of chances for accidents, damages, etc.) you become legally required to have employers’ liability coverage, which can be expensive. You can see the additional cost in the table below—adding an employee to a £2M PL + personal accident + £2,000 tools (left in van overnight) over doubles the price of the initial policy, adding over £425 of monthly cost.

graph showing the average cost of agricultural contractor insurance in the UK
Average Cost of Agricultural contractors (excluding crop spraying) insurance
for a self-employed sole traderaverage cost per annum
£2M Public Liability (PL)£139
£5M PL£147
£2M PL, £2,000 Tools (not left in van overnight)£153
£2M PL, £2,000 Tools (left in van overnight)£230
£2M PL, £10,000 Tools (left in van overnight)£337
£2M PL, Personal Accident£244
£2M PL, Personal Accident, £2,000 Tools (left in van overnight)£336
£2M PL + 1 Employee + £2,000 Tools (left in van overnight) + Personal Accident£765
£2M PL + 10 Employees + £2,000 Tools (left in van overnight) + Personal Accident£2,055

Where can I get agricultural contractor insurance quotes?

Compare agricultural contractor insurance quotes here—after filling out a short form you'll receive quotes from up to five insurance providers. You'll have the chance to talk on the phone if you have questions that you want to discuss. Then choose the cover that offers the best price and features for your needs.

Agricultural Contractor Pay and Statistics

graph showing the average cost of agricultural contractor insurance in the UK
RegionAverage Salary
Farm Workers National Average£19,910
London£18,352
East£19,238
North West£19,835
Yorkshire and The Humber£20,488
East Midlands£21,135
South East£21,445
Wales£22,215
South West£22,815
North East£22,914

According to the National Association of Agricultural Contractors (NAAC), more than 91% of farms in the UK use contractors to help them complete work. The NAAC also includes a pricing guide for how much you can expect to receive per acre/hectare for the most common types of work you’ll be doing. Some clients may prefer to agree an hourly rate with you irrespective of the work you’ll be doing, and how much this typically varies depending on the task, but you can expect it to look something like the NAAC’s figures.

FAQs

Agricultural contractors are generally exposed to a higher level of risk than your traditional UK worker. Compared to those working in traditional “white collar” industries and jobs, you’re far more likely to be involved in an accident or cause damage to property. This means your insurance costs are more expensive to cover the additional likelihood of it being required.

Traditional methods of saving on insurances still apply here. More experience in the industry (years worked), lower levels of coverage (from £5M to £2M Public Liability, for example) and storing your tools securely (not in your vehicle) overnight will help reduce your costs. If you haven’t had any claims or convictions against you then you’ll save money as well.

Dozens of quotes were gathered for a ‘typical’ agricultural contractor. Our sample profile had less than 1 year of experience and lived in the outskirts of London. Quotes were received from a number of different sources, and no fewer than the three cheapest quotes were averaged to give us our results.

Your costs may be higher or lower depending on the difference in variables your risk profile is measured by.

Luke Masters

Luke is a freelance research associate. Prior to NimbleFins, he worked at FreshMinds, Investigo and BMW. His work in data analytics, pricing, strategy and business development now help him write business insurance content to support SMEs. Read more on LinkedIn.

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