Grains of Knowledge

Warning – Excessive snow presents danger of roof collapse

Over the past several months, there have been several incidents of roof collapse of various types of agricultural buildings across the upper Midwest and Northeastern states.   These have caused not only property damage but death of livestock and potential harm to any people inside these buildings.   Some media outlets have reported that collapse is excluded from some insurance policies.  Collapse is normally an available peril.  If you do not know if you are covered, check with your agent or insurance carrier. 

More importantly, take action now to watch your farm buildings for excessive snow loads.  A recent article on the University of Minnesota Extension web page, highlighted some considerations to protect your farm buildings from the potential of roof collapse. 
University of Minnesota Extension News

Snow loads for agricultural buildings in parts of the Midwest are around 20 pounds per square foot. However, roofs are designed to support this snow load for several days to a few weeks.  Generally, the roof will not be designed to support the snow load for more than 30 days.  With weather like we have experienced in 2010, you should be concerned with potential fatigue that can lead to the collapse.  If you have too much snow on your roof the easy solution is to get it off.  Obviously this can be easier said than done given the weather conditions and danger associated with this process. 

Another concern is excessive snow drifts.  Snow drifts around a building can put pressure on the side walls that can also lead to collapse.  Be cautious to remove any snow around your building to prevent drifting against your building.  In some cases, we have heard where insured customers have hired a contractor to remove snow from their barns.  This is not only the best approach to keep the insured or their employees safe, but the amount spent to hire the contractor may be less than the amount of the deductible if a collapse loss were to occur.

The website for the Cooperative Extension at Cornell University also has some great resources around snow loads, roof collapse and preparing for winter weather.  You can access the Winter Safety guide under the Preparedness Resources section of the website. 

This has been a winter to remember and it does not show any signs of letting up soon.  The collapse exposure will continue to be a concern.  As we long for warmer days, we may see more stress on roofs as snow melts in warmer weather and as snow, rain and ice combine.  Stay safe this winter and hope that warmer weather is just around the corner.

Source: Flickr

10 Tips on Attracting an Insurance Suitor: Meeting the insurance and risk management needs of large agricultural businesses

It’s Saturday night and you know you have a date with the girl or guy of your dreams.  What might you do to get ready for the date? Well, if you’re interested in making a good impression, you’re going to want to clean up and dress up. You’re going to “put your best foot forward.”

The same is true if you’re presenting your business and its risks to insurance carriers, in the hope of negotiating the best coverage and terms. Try to think of your agent as a matchmaker and the carriers as your partner in protecting your business from personnel, asset, income, and liability loses, which can impair your ability to survive a loss and/or affect your ability to generate income to pay overhead and make a profit.

1.) The Matchmaker
Well, to start the process, we have to pick our matchmaker. You don’t just want anybody finding a partner in protecting the business you built. Your agent should understand your business and industry. Should have the credentials to prove he/she is a commented professional and be able to supply you with a list of accounts of similar class and size that is currently being serviced by the firm. 

2.) An Effective Strategy
Have the agent explain how they intend to handle the marketing process. Are they a commodity seller (lowest up front price) or are they a valued seller (price, service, non-insurance alternatives to achieve and maintain, the, “lowest net cost of risk) (LNCR).” An example of commodity price failure in achieving LNCR, would be writing your Workers Compensation insurance with a carrier offering the lowest going in price, but performing poorly on handling claims. This results in a 25% increase in your experience modification. Which approach had the lowest net cost?

3.) The Importance of Timing
Start early. Give the process the amount of time it deserves to produce a good result.  This is usually 120 days prior to renewal. It may seem like a lot of time, but when your potential partner has sufficient time to know all aspects of your operation, they have more of a willingness to offer favorable terms. 

4.) A Compelling Story
In presenting the required underwriting information, keep in mind that you are presenting your story. Most owners and/or managers are very proud of the business they have built.  By telling your story, your demonstrating “pride of ownership” and management’s level of involvement in the business operations. Here are some of the questions you and your agent should include in your story (narrative):

1. Description of operations, history, and organizational chart of the
business
2. Owner’s and manager’s experience and background
3. Radius of marketing area, key customers and suppliers
4. Management’s involvement in safety and risk management
5. Safety and claims cost control programs in place
  a. Safety committee, membership makeup, certification, sample of minutes
  b. Fleet safety committee, MVR program, CDL/DOT program
  c. Hiring practices, wage & benefit levels, turnover rates, position descriptions including light duty
  d. Employee orientation and ongoing training
  e. Any incentive/accountability programs
  f.  Claim reporting procedures
  g. Accident investigation programs, and sample report
  h. Preventive maintenance programs
  i.  OSHA compliance programs
  j.  Claims administration procedures, RTW, Doctors Panels

5.) A Kodak Moment
It’s been said, “A picture is worth a thousand words.” Have your agent make a DVD of a walk through of your operation. I’ve used this in my past agency experience and it makes a great impression with the carrier’s underwriter. It adds to your presentation and gives your risk a priority in being worked on and getting those favorable terms. If a DVD recorder is not available, at a minimum, include pictures of each building.

6. A Personal Touch
Make sure your agent personally meets with the carrier underwriter and presents your risk in a binder. It might make sense for the agent to send the binder beforehand so questions can be noted prior to the meeting. 
 
7.) Getting to Know You
If the carrier is seriously considering being your partner, they will schedule a risk control specialist to meet with you. Take the time to meet (COURT) him/her and explain what, where, when and how your business is committed to controlling your frequency and severity of loses. 

8.) You Can Do What?
Let them know any risk control and/or special claims handling you are looking for (i.e. safety committee certification, supervisor training, dedicated adjuster, notice on large reserve changes, claims reviews, etc.).  Make sure the agent and the underwriter also accompany you during the visit and any walk through; the more involvement by each stakeholder the greater their buy in to the partnership.  Remember the saying, “There is only one thing worse then not being married, and that’s being married to the wrong person.”  You want to make sure that all the parties are committed to the proposed business relationship.

9.) Get it in Writing
Make sure you get a written proposal from your agent outlining the terms and conditions being offered and a copy of the service plan.

10). How are we going to pay for this?
Finally, get the carriers payment terms, with any customization to meet your cash flow needs.

Safety tips for unloading grain bins for delivery

 

  
Source: grainbinservices.com 

If you're interested in learning more about safety issues when dealing with the 2009 corn crop, take a look at this article written by Stu Ellis at University of Illinois at Urbana - Champaign.  He reminds us of the importance of working safely when unloading grain bins for delivery, especially considering the high moisture levels of last year's crop. (To read the full story below, click the link at the bottom of this post)

Just like the mythological demons that heroes could not kill, the 2009 corn crop continues to claim victims. Well beyond the delayed harvest and all of its ramifications, the wet corn in storage is a sleeping ogre, awaiting an opportunity to grab someone attempting to break a moldy crust atop a bin and be sucked into an inescapable engulfment of flowing grain. A grizzly thought, but it has happened many times, and unfortunately, will likely happen again.

via http://www.farmgate.illinois.edu/archive/2010/02/heartaches_from.html

2010 Pennsylvania Dairy Summit

On February 3rd and 4th, we partnered with the Bernard C. Morrissey agency for a booth at the 2010 PA Dairy Summit in Lancaster.  There were a number of excellent speakers, including dairy farmers and others from the industry.  Since we had just had several inches of snow, we simply had to walk outside to keep our ice cream frozen.  The highlights of the two day event (other than the ice cream) included:

• Early Bird Session - Gave farmers the opportunity to hear from 3 of their peers on how benchmarking has helped them improve their efficiency and resulting production.
• Rob Aukerman from Elanco Animal Health - Talked about the need for technology to help the world meet our growing need for food production.
• Jim Ostrom from Rosendale Dairy - Jim and his partners have built the largest dairy farm in Wisconsin. The facility is on 130 acres and the barns themselves span 13 acres each.  He shared the story of their journey and the lessons learned as they built their facility to be environmentally sound, modern and efficient.
• McDonalds - Mary Munoz took us through McDonald's journey as they strive to reinvent their brands and meet the evolving demands of their consumers.  The recent launch of the McCafe coffee drinks has a very positive impact on the dairy industry - each drink is nearly 70% dairy!
• Wegmans Food Markets- Ken Cassara of Wegmans explained that after attending the dairy summit last year, he developed a passion for sharing the dairy farmers story through Wegmans.  This resulted in a number of dairy farm visits in the spring and summer of 2009 by Ken and a number of other Wegmans employees.  This year they will feature their relationship with the dairy industry in the Wegmans Menu Magazine highlighting their farm visits and educating consumers on the importance of the local dairy industry.  This effort will continue with in store promotions.
• Roger Crawford - Roger spoke about Overcoming Obstacles with Resiliency.  With passion, humor and hard-won wisdom, Roger inspired us to reevaluate our own limitations, real or imagined just as he has his own physical impairments.  The skills he talked about can help people develop a resiliency and strength to turn adversity into ambition.  Despite obstacles, we all have the capacity to achieve great success!

The 2010 Pennsylvania Dairy Summit was another great event that allowed farmers and industry fans to learn and network.  We had plenty of opportunities to drink milk, visit vendor booths, drink milk, talk with dairy farmers, eat dairy products and drink more milk!

Guest Authors: Amanda Logeman, Diane Winters and Vicky Makins co-wrote this summary of the Dairy Summit.  As Agribusiness Underwriters at Westfield, they enjoy investing time in events that bring them closer to their customers and allow them to develop a greater understanding of issues impacting them. 

Ohio Pork Congress - Pigs, People and Snow!

This week we braved the snow to attend the Ohio Pork Congress in Columbus, Ohio. The morning session of this annual event included a trade show, a general session, and speeches from Dr. Ron Plain, Lawrence Firkins and Sarah Probst Miller. The topics ranged from the general outlook for the pork industry in 2010 to employee engagement to the process and related financial impact of individual pig care.

Overall, this was a great event to attend for many reasons. One of the main benefits was to see our customers and the businesses that support the pork industry. It is important for us to understand what issues they face and how we as a partner can help our customers and agents.

Here are some key learnings from the event:

• Pork outlook for 2010 is a break even year with positive indications for the middle of the year
• With current grain prices, the break even price for pigs is .50/lb live weight
• Employee engagement = profitability
• Great book called "12: The Elements of Great Managing" by Rodd Wagner provides pointers on how to improve employee engagement
• Share your vision, be clear in your expectations, and share frequent feedback with all employees to drive engagement
• Overall, preventative individual pig care will save money and resources
• Conduct a daily walk through to examine pigs – if you can identify a sick pig early your treatment success and overall expense associated with pig care will improve
• Check out the virtual game at www.virtualwalkingpens.com to practice your individual pig care skills

The Ohio Pork Congress was time well spent. We saw customers, agents and producers and were able to stay connected and understand what is important to those in the pork industry. This will help continue our partnership and support as a trusted advisor.

Making a Statement - Westfield Group 2010 Annual Meeting

This morning, I attended the 162nd Westfield Group Employee Annual Meeting (it's amazing to work for a company that's been here since 1848!).  This corporate presentation is one that I look forward to every year as we take time to re-cap the events of the previous year, but also take the time to frame up the initiatives that will take place in the coming months.

This year's theme was "Making a Statement" and my major take-aways included:

• Pride in the fact that the actions of our company are grounded in our strong core values - ethical conduct, financial integrity and respect for people. This is evident on a daily basis, but was showcased throughout the meeting this morning as we were reminded of the high levels of customer satisfaction with our claims adjustors, experienced the continued transparency of our financial results and were thanked by our senior leaders for the work that we do every day. It's neat to know that they appreciate the real people who work for Westfield and recognize that the hard working customers we serve on a daily basis are truly the backbone of America!
• Excitement that AM Best has given us another "A" (Excellent) financial strength rating and that they noted that we have a stable financial outlook! Considering the global economic issues over the past year, it's great that we have worked hard to maintain a healthy balance sheet so that we have the appropriate funds to pay claims for our customers who trust in us to provide them peace of mind and a promise of protection! To learn more about our company, check out our website!
• Lastly, one of my favorite comments was shared by our President, Jim Clay, "When you think food, think Westfield"! As an underwriter in our AgriBusiness Division, I wanted to stand up and start clapping when I heard these words! In AgriBusiness, we focus on customers who own and/or operate farms and commercial agribusinesses, but as a company we also focus on more general businesses who deal with food, like restaurants and grocery stores. Westfield has a very broad spectrum of expertise, which when we all work together, helps us to provide a better service to our independent agents and customers.

Tomorrow we are expecting over 500 Westfield Independent Agents and guests to be on-site for the formal 2010 Westfield Group Annual Meeting and are looking forward to opportunity of sharing our results, our vision for the future and as always, the good fellowship that comes with being together!

How much insurance should I buy for my building?

There are many decisions to make when purchasing insurance coverage. One of the most important is the limit of insurance you choose to buy. For buildings, the limit should be high enough to rebuild the structure and replace fixtures at current replacement value. This isn’t the same as the market value or the tax valuation. Instead it’s the price a contractor would charge to build the structure from scratch including their materials and profit.

Most insurers require that the amount of coinsurance on property be at least 80% of its replacement cost; however, some companies may require 100%. It is important that you know what the policy requires. If your property is not insured to the percentage of its value that is required by your policy and you have a loss, the insurance company will apply a coinsurance penalty and you will not receive the total value of your loss.

The tricky part is that the cost to rebuild your building can change significantly over time due to changes in the cost of building materials, demand for construction in your area and any changes you make to the structure. At least annually, consider any upgrades you have made that change the value of the structure and other external factors that impact the cost of construction in your zip code.

Is your child ready for farm chores?

Since I work with dairy youth programs, this topic captured my curiosity. However, as a parent who had regularly enforced chores upon our sons, I had not posed such a question to myself when they were growing up.

via www.farmanddairy.com

Understanding that the vast majority of farming operations are run by families, we know that some farm chores are often taken on by older children and teenagers. As a parent, how do you know if you're matching the correct task with your child's age and skill level? This story from The Farm and Dairy shares some great tools for determining the appropriate combination.

If an accident does occur, you may also be wondering if Worker's Compensation would cover the claim. If the child is an employee of the operation an accident could be covered by Worker's Compensation, however depending where you live and the details of what happened, there could be penalties if you're violating your state's child labor laws.

As always, talk with your Westfield Independent agent to learn more!

Welcome to Westfield’s’ AgriBusiness Division

We may be new to blogging, but we’ve been in business since 1848!  With 162 years of insurance expertise, we intend to use this venue as a place to share our thoughts on insurance and agricultural industry trends and happenings, farm and commercial agribusiness insurance policy structure, information on specific types of farms and agribusinesses, resources for greater learning and much more!  With that being said, welcome to the Westfield Insurance AgriBusiness Division blog, we hope that you make us a favorite on your web browser!

To help you get a feel for who we are and what we’re all about, below is a list of the “Top 5 Ways We Focus on Agribusiness” here at Westfield Insurance.

Top 5 Ways We Focus on AgriBusiness:

1. Our staff of 36 employees have a combined tenure of 481 years working for Westfield, the vast majority of those years have been spent in our ag department
2. Speaking of staff, many of them grew up on farms or have developed a strong adulthood connection to agriculture. Some of the industries we have personal expertise in include: Swine & Hog operations, Mill & Elevators, Grain Farming, Equine and Dairies.
3. Because of our long average tenure and personal expertise, we have a very collaborative spirit within our teams. This helps us to learn from one another and provide better service to our customers.
4. To build deeper knowledge of our clients, we rely heavily on three sources: 1.) Independent Agents who work directly with Westfield policyholders, 2.) Westfield Loss Control Specialists; and 3.) Our Underwriters who focus on meeting with some of their policyholders each year.
5. To follow trends in agriculture, we keep abreast of the latest news by subscribing to industry publications, attending industry tradeshows & seminars and becoming members of specific trade associations.

As you read the posts we share in the future, we’d like to welcome your questions and comments as this will help us to provide meaningful content to our readers!