Stud stock insurance: understanding the cover

An overview of stud stock insurance, including mortality, loss of use, animal values and why livestock cover under a farm policy should not be assumed to apply.

A good breeding animal takes time to find. Whether you’ve bought a bull at auction, selected rams for the coming season or retained females from your own breeding program, there’s a fair bit riding on those decisions.

If an animal dies, the financial loss can be considerable. Finding a suitable replacement can also take time. Stud stock insurance deserves specific attention, particularly where losing one animal would be difficult to absorb.

Don’t assume your farm policy covers stud stock

Having livestock included in your farm insurance does not confirm that your stud animals are insured. Stud stock may be excluded or subject to specific limits and conditions.

A general livestock sum insured is not enough to establish cover. The arrangements need to account for the particular animals, their values and the events insured. This distinction is worth resolving before relying on a farm policy to meet a stud stock loss.

“Having livestock on the schedule is not the same as confirming cover for your stud animals.”

What stud stock insurance can include

Mortality cover addresses the financial loss when an insured animal dies. Accident, illness and disease may be included, although the causes covered and exclusions differ between insurers.

Cover may also extend to an animal that needs to be humanely put down, provided the circumstances meet the relevant requirements. Theft may be available as an additional benefit.

An animal that survives but can no longer breed presents a different risk. Loss of use cover, where available and selected, may respond to permanent loss of breeding ability from specified causes. Veterinary evidence and an assessment period may be required.

Poor breeding results alone do not necessarily amount to an insured loss. Mortality and loss of use are separate considerations when comparing the options.

Getting the value right

A recently purchased animal has a documented price. For stud stock bred and retained on the property, establishing its value may take more work. Breeding females deserve consideration alongside bulls and rams.

The amount recorded on the insurance schedule needs to be understood alongside how a claim would be calculated. A sum insured can be a maximum payment limit, rather than a fixed amount payable following a loss. Market value at the time of loss and any applicable deductions may affect the settlement.

Purchase invoices and valuation records help support the amount nominated. At renewal, it makes sense to revisit those figures and account for changes in the animals insured or their ownership.

The financial effects on the stud operation are a separate matter. A mortality payment should not be assumed to include lost breeding income or other costs arising from the animal’s loss.

Around sale day and transport

Sale day involves plenty of decisions, and insurance is easier to sort out beforehand.

Cover may start at different times for different causes of loss. Accident cover could be in place while a waiting period still applies to illness or disease. The purchase arrangements can also affect commencement, so the starting point needs to be clear.

The trip home deserves attention too. Transport restrictions may apply, particularly where a journey includes a sea or air leg.

Settling these details before the animal changes hands helps buyers and sellers understand their arrangements without relying on assumptions about someone else’s insurance.

If something happens

When an animal is seriously ill or injured, veterinary care is the immediate concern. Early contact with your broker also helps establish the notification and evidence requirements for a potential claim.

Veterinary reports, animal identification and documents supporting its value may be needed. If an animal dies, a post-mortem may be required, so it is important to establish this before arranging disposal.

Knowing who to contact and keeping those records accessible can make the process easier to manage at a difficult time.

RMA Insurance Brokers can help you review your stud stock insurance, explain the differences in cover and work through the options before a purchase or renewal. Contact us to discuss your cover.