Updated October 2025

Dairy Farm Insurance in New Zealand - Updated October 2025

Comprehensive insurance packages for dairy farming operations. Protect your herd, dairy infrastructure, equipment, and business income with specialist coverage from New Zealand's leading rural insurers.

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Understanding Dairy Farm Insurance in New Zealand

Dairy farm insurance provides comprehensive protection specifically designed for New Zealand's dairy industry, the backbone of our agricultural economy. With the average dairy farm representing capital investment of $5-15 million including land, the median 400-cow operation holding assets of $2-4 million in livestock, buildings, and equipment alone, and annual operating costs exceeding $500,000, comprehensive insurance coverage is essential business protection rather than optional expense.

New Zealand dairy farming faces unique risks that generic farm insurance cannot adequately address. The concentration of valuable livestock in relatively small areas, sophisticated and expensive dairy infrastructure requiring daily operation, environmental compliance obligations, the seasonal cash flow cycle creating vulnerability to production losses, and the industry's exposure to international market volatility all create insurance needs requiring specialist understanding and tailored coverage.

The 2025 dairy insurance environment reflects significant industry changes including increased focus on environmental sustainability and regulatory compliance, climate resilience as extreme weather events impact operations more frequently, business diversification with many farms adding value-added products or tourism, technology integration in modern dairy operations, and evolving biosecurity threats following lessons from the Mycoplasma bovis outbreak. These factors make comprehensive, properly structured dairy insurance more critical than ever for protecting both farm assets and business continuity.

Essential Components of Dairy Farm Insurance

Dairy Herd Insurance

The dairy herd represents the single most valuable asset on most dairy farms, typically worth $1.5-3 million for a 400-cow operation in 2025. Herd insurance covers accidental death, emergency destruction due to injury or sudden illness, deaths during calving, natural disaster losses (floods, fires, lightning), and deaths from covered perils including dog attacks and vehicle strikes.

Most dairy herd policies distinguish between milking cows, rising two-year-olds, and replacement stock, with different per-head values assigned to each category. High-genetic-value animals including proven high-producers or elite breeding cows can be individually listed for higher values. The 2025 market has crossbred Friesian-Jersey cows averaging $1,800-2,200, with quality genetics commanding premium values.

Standard herd insurance excludes routine disease, general illness, and normal mortality. Policies typically apply minimum loss thresholds - often requiring losses to exceed 2-4% annual mortality before claims are payable. However, following Mycoplasma bovis, some insurers now offer optional disease response extensions covering government-mandated culling for specific biosecurity threats.

Premiums typically run 1.5-3% of insured herd value annually. A $2 million herd might cost $30,000-60,000 to insure, with rates reflecting farm location, management practices, claims history, and coverage level. Many dairy farmers insure only the milking herd rather than all stock, focusing protection on the capital breeding animals most expensive to replace.

Dairy Buildings and Infrastructure

Dairy infrastructure requires specialized coverage beyond standard farm buildings insurance. The milking shed (whether rotary or herringbone), milk vat room, calf rearing facilities, feed storage (silage pits, hay barns), effluent management systems, and supporting infrastructure represent substantial investment requiring comprehensive protection.

Modern rotary dairies can cost $1-2 million including installation, while even modest herringbone sheds with automated systems exceed $300,000-500,000. These facilities cannot be without replacement for extended periods without severe business impact. Many policies include business interruption coverage compensating for lost milk income during dairy shed repairs or rebuilding.

Critical considerations include ensuring replacement cost coverage rather than indemnity value (particularly important for older infrastructure where rebuild costs vastly exceed depreciated value), coverage for building code upgrades required when repairing damaged facilities, temporary milking facility costs if your dairy shed is destroyed, and effluent system coverage including ponds, pipes, and pumps.

The residential farmhouse typically has EQC coverage for natural disasters up to $150,000, but dairy sheds and farm working buildings have no EQC protection. Private insurance must provide comprehensive earthquake coverage for all dairy infrastructure - a critical consideration given New Zealand's seismic activity and the catastrophic business impact of losing dairy facilities.

Dairy Equipment and Machinery

Dairy farming requires substantial equipment investment including tractors and farm vehicles, feed wagons and mixers, silage-making equipment, effluent tankers and spreaders, portable generators and backup power, herd management technology, irrigation systems, and general farm implements. Total equipment values typically range $400,000-800,000 for a standard dairy operation.

Equipment insurance should cover accidental damage, fire and theft, weather damage, and optionally mechanical breakdown (highly recommended for critical equipment like feed mixers and effluent tankers where failure severely impacts daily operations). Transit coverage protects equipment during transport, while off-site coverage extends protection to equipment temporarily located away from your property.

Many dairy farmers underinsure equipment by using purchase prices from years ago rather than current replacement costs. With equipment prices increasing 25-35% from 2020-2025 and exchange rate fluctuations affecting imported machinery costs, annual value reviews are essential. A tractor purchased for $150,000 five years ago might cost $200,000+ to replace today.

Consider agreed value coverage for specialized or high-value equipment to eliminate valuation disputes at claim time. Business interruption extensions can cover hire equipment costs or lost production if critical equipment fails - particularly valuable for seasonal equipment like silage harvesting machinery where delays cost thousands daily.

Public and Products Liability

Dairy farms face significant liability exposures requiring comprehensive coverage. Third-party injury from farm tours or visitors, contractor injuries on your property, neighbor disputes (spray drift, effluent contamination, stock escapes), public interaction if selling dairy products direct to consumers, and environmental liability from accidental pollution events all create potential claims situations.

Standard dairy operations typically require $2-5 million public liability coverage. Farms with tourism activities, farm shops, or value-added dairy product production should carry $5-10 million minimum. Product liability extensions are essential if producing and selling cheese, yoghurt, ice cream, or other dairy products direct to consumers.

Environmental liability coverage has become increasingly important. Accidental effluent discharge into waterways, fertilizer runoff, or chemical contamination can result in both regulatory fines and civil claims from affected parties. The 2025 regulatory environment has strengthened environmental enforcement, making adequate environmental liability coverage essential.

While New Zealand's ACC system reduces personal injury liability compared to other countries, you can still be sued for exemplary damages (punitive damages for gross negligence), property damage, economic loss, and injuries outside ACC's scope. International visitors injured on your property may pursue claims in their home jurisdictions where ACC doesn't apply.

Business Interruption Insurance

Business interruption insurance compensates for lost income when insured events prevent normal farming operations. For dairy farms with daily milk production and regular income streams, business interruption coverage is crucial protection against catastrophic losses extending beyond physical damage to property or livestock.

Coverage typically includes lost milk income if dairy facilities are destroyed or damaged, additional costs of emergency measures to maintain milk production, extra expenses for temporary milking arrangements, and potentially compensation for herd evacuation or emergency housing costs. Policies usually cover income loss for specified periods (3, 6, or 12 months) while facilities are repaired or rebuilt.

Calculate sum insured based on your average milk income over the indemnity period plus potential additional costs. A farm producing $1.2 million annually in milk income would need approximately $600,000 business interruption coverage for six months, plus allowance for additional costs. Don't forget to account for seasonal variations - damage occurring at peak production has greater income impact than off-season losses.

The 2025 environment has seen particular focus on business interruption following extreme weather events where farms lost production capacity for extended periods. Ensure your coverage includes damage from all relevant perils (flood, fire, storm, earthquake) and that indemnity periods are adequate for realistic rebuild timeframes given current supply chain constraints.

Employers' Liability and Workers' Compensation

Dairy farms employing staff require employers' liability coverage beyond ACC's statutory coverage. While ACC provides no-fault injury coverage for employees, you can still face common law liability in certain circumstances. Employers' liability insurance covers legal costs defending employment-related claims and potential damages if found liable.

The dairy industry's labor intensity creates particular employment risks. Herd managers, milkers, calf rearers, and general farm workers face daily hazards from livestock, machinery, and farm operations. The Health and Safety at Work Act 2015 creates extensive employer obligations requiring documented safety systems, hazard management, and worker training.

If employing migrant workers under recognized seasonal employer schemes or working holiday visa arrangements, ensure your insurance covers all employees regardless of visa status. International workers may have different rights or claim pathways than New Zealand citizens, creating additional liability exposures.

Premiums for employers' liability typically calculate based on annual wages/salaries paid, ranging from 0.5-2% of total payroll depending on farm size, worker numbers, and claims history. A dairy farm with $300,000 annual payroll might pay $2,000-6,000 for employers' liability coverage.

What's Typically Covered in Comprehensive Dairy Insurance?

Dairy Herd - Accidental Death

Coverage for sudden death from accidents, natural disasters, emergency destruction, and specified perils affecting your milking herd.

Dairy Infrastructure

Milking sheds, vats, calf facilities, effluent systems, and supporting buildings with replacement cost coverage.

Dairy Equipment

Tractors, feed wagons, silage equipment, effluent tankers, and farm machinery with optional mechanical breakdown.

Business Interruption

Lost milk income and additional costs when insured events prevent normal dairy operations.

Public Liability

Third-party injury, property damage, and environmental liability from dairy farming operations.

Transit and Storage

Coverage for feed, supplements, and dairy products during storage or transport.

Dairy Farm Insurance Costs in New Zealand (2025)

Comprehensive dairy farm insurance represents significant annual expense but essential business protection. Understanding typical costs helps farmers budget appropriately and identify competitive quotes.

Typical Annual Premium Ranges (2025)

Small dairy farm (200 cows): $12,000 - $25,000 comprehensive coverage
Medium dairy farm (400 cows): $25,000 - $45,000 comprehensive coverage
Large dairy farm (600+ cows): $45,000 - $80,000+ comprehensive coverage

These ranges assume comprehensive packages including herd ($2-4M), buildings ($1-2M), equipment ($400-800k), business interruption, and liability coverage. Basic coverage excluding business interruption and comprehensive equipment protection might reduce costs by 20-30%.

Premium Breakdown Example - 400 Cow Dairy Farm

Dairy herd insurance (400 cows @ $2,000 = $800,000 @ 2%): $16,000
Buildings & infrastructure ($1.5M @ 2%): $9,000
Equipment & machinery ($600,000 @ 2%): $8,000
Business interruption (6 months cover): $4,000
Public liability ($5M cover): $2,500
Employers' liability ($250k payroll): $3,000
Total Annual Premium: $42,500

This example shows typical mid-range coverage. Multi-policy discounts (10-15%) could reduce total to approximately $36,000-38,000. Higher excesses or excluding optional coverages could reduce further but leaves greater exposure.

Factors Affecting Your Premium

Herd Size and Value

Larger herds cost more to insure in absolute terms but often benefit from economies of scale with slightly lower percentage rates. A 200-cow herd might attract 2.5% rates while a 600-cow herd achieves 1.8-2% rates. High-genetic-value herds with exceptional breeding worth command premium valuations requiring higher premiums but provide better protection.

Farm Location and Natural Hazards

Properties in flood-prone areas, earthquake zones, or regions experiencing frequent extreme weather face premium loadings of 10-30%. Conversely, farms in lower-risk areas may receive discounts. Distance from emergency services, particularly fire response, significantly impacts building insurance costs. Properties more than 10km from fire stations may see building insurance increase 10-25%.

Management Practices and Claims History

Demonstrated good management through low mortality rates, documented maintenance schedules, safety systems, and environmental compliance can reduce premiums 10-20%. Clean claims history earns increasing no-claim bonuses, potentially reaching 25% discounts after 5+ claim-free years. Conversely, multiple claims within 3-5 years can increase premiums 20-50% or result in higher excesses.

Coverage Levels and Excesses

Higher excesses significantly reduce premiums. Increasing herd insurance excess from $500 to $2,500 per head might save 15-20% on herd premiums. Building and equipment excesses ranging $2,500-10,000 similarly impact costs. However, ensure excesses remain affordable if claims occur. Some insurers apply percentage-based excesses to high-value items (5% of claim value, minimum $5,000) which can result in substantial out-of-pocket costs.

Infrastructure Age and Condition

Modern dairy sheds built to current standards with fire protection systems, structural integrity, and good maintenance attract lower premiums than older facilities. Heritage or non-standard construction may face premium loadings. However, ensure older infrastructure has replacement cost coverage - rebuilding a 30-year-old dairy shed to modern standards costs far more than its depreciated value.

Tips to Reduce Dairy Farm Insurance Costs

• Bundle all insurance (herd, buildings, equipment, liability) with one provider for multi-policy discounts of 10-20%
• Maintain comprehensive records demonstrating low mortality rates and good herd management
• Implement documented safety and environmental management systems
• Install fire detection and suppression systems in dairy sheds and buildings
• Review sum insured values annually - over-insuring wastes money, under-insuring creates claim shortfalls
• Join industry organizations like DairyNZ or Federated Farmers for potential member discounts
• Consider higher excesses if you have reserves to cover them
• Pay annually rather than monthly to avoid installment fees (typically 5-8% savings)
• Work with specialist rural insurance brokers who understand dairy farming
• Implement GPS tracking on high-value equipment to reduce theft risk and premiums

New Zealand Dairy Industry-Specific Considerations

Fonterra and Supply Continuity

Most New Zealand dairy farmers supply Fonterra, creating specific insurance considerations. Fonterra's quality standards require continuous milk supply during the season - failure to supply can affect your relationship with the cooperative and potentially impact future supply agreements. Business interruption coverage ensuring you can maintain milk supply during facility repairs or emergencies is therefore particularly important.

If dairy shed damage prevents milking, business interruption coverage should include costs of emergency milking arrangements, potential milk dumping costs if you cannot meet quality standards, transport costs to alternative facilities, and lost income during repair periods. Some policies specifically cover Fonterra penalties or reduced payout resulting from quality failures caused by insured events.

Independent dairy companies (Synlait, Miraka, Open Country, etc.) have similar requirements but may have different tolerance for supply interruptions. Ensure your insurer understands your specific supply arrangements and that business interruption coverage aligns with your processor's requirements.

Environmental Compliance and Liability

The 2025 dairy industry operates under comprehensive environmental regulations including resource consent conditions, farm environment plans, nitrogen cap requirements, and strict effluent management obligations. Breaches can result in substantial fines and civil liability claims from affected parties.

Environmental liability insurance covers accidental pollution events including effluent pond failures, discharge system malfunctions, tanker spills, or fertilizer runoff. However, coverage typically requires you to have appropriate consents and be operating in compliance with regulations. Deliberate discharges, ongoing non-compliance, or lack of required consents may invalidate coverage.

The cost of environmental remediation following pollution incidents can be substantial. A significant effluent discharge might cost $50,000-200,000 to clean up beyond regulatory fines. Ensure your environmental liability limits are adequate - $1-2 million minimum for dairy farms with potential for significant discharges.

Some insurers now offer compliance support services helping maintain environmental obligations and reduce breach risks. These value-added services can include compliance audits, regulatory update notifications, and best practice guidance, providing both risk reduction and potential premium benefits.

Mycoplasma Bovis and Biosecurity

The Mycoplasma bovis outbreak fundamentally changed livestock insurance in New Zealand. Standard herd insurance does NOT cover government-mandated culling for biosecurity purposes, leaving many farmers with uncompensated losses. The response program cost affected farmers millions in uninsured losses despite government compensation schemes.

Following M. bovis, some insurers now offer optional biosecurity disease extensions covering government-mandated destruction for specified diseases. These extensions typically cost additional 0.5-1.5% of herd value but provide crucial protection against future biosecurity events. Given increasing global disease pressures and New Zealand's isolation advantages we're protecting, this coverage warrants serious consideration.

NAIT (National Animal Identification and Tracing) compliance is now often a policy requirement for herd insurance. Insurers use NAIT data to verify animal movements, ages, and ownership. Failure to maintain accurate NAIT records can invalidate claims. Ensure your NAIT compliance is current and accurate, reporting deaths within required timeframes and maintaining movement records.

Climate Change and Extreme Weather

The 2023-2024 weather events highlighted dairy farming vulnerability to extreme weather. Flooding in Northland, Coromandel, Hawke's Bay, and other regions caused substantial stock losses, infrastructure damage, and prolonged production interruptions. Droughts in other areas created feed scarcity and production challenges.

The 2025 insurance market increasingly reflects climate risk modeling with updated flood mapping and weather-related risk assessments. Properties in flood-prone areas may face premium increases or specific flood-related excesses. However, unlike some building insurance where flood exclusions are applied, livestock and business interruption coverage generally maintains comprehensive weather event coverage.

Ensure your coverage adequately addresses climate-related risks relevant to your location. Flood-prone areas need comprehensive flood coverage for livestock, infrastructure, and business interruption. Drought-prone areas should consider feed shortages (though standard policies typically exclude starvation losses). Coastal properties face storm and salt spray risks requiring specific consideration.

Sharemilking and Contract Milking Arrangements

New Zealand's unique sharemilking system creates specific insurance considerations. The division of assets between farm owners and sharemilkers requires clear understanding of who insures what. Typically, farm owners insure land, buildings, and permanent improvements, while sharemilkers insure their livestock, machinery, and equipment.

However, gray areas exist - who insures dairy shed equipment? Portable calf rearing facilities? Effluent systems? Sharemilking agreements should specify insurance responsibilities clearly. Both parties need adequate liability coverage as both face potential liability exposure from farm operations.

Contract milkers typically have different insurance needs again - they usually don't own stock but need equipment insurance and liability coverage. Variable order sharemilkers have intermediate arrangements. Ensure your insurance broker understands your specific arrangement and that all assets and liabilities are adequately covered without gaps or unnecessary overlaps.

Dairy Diversification Activities

Many dairy farms now diversify into value-added activities including on-farm processing (cheese, yoghurt, ice cream), farm shops and direct sales, agritourism and farm tours, farm stays or glamping, and complementary enterprises (beef finishing, cropping). These activities create additional insurance requirements beyond standard dairy coverage.

Product liability coverage is essential for value-added dairy products. Food safety requirements under the Food Act 2014 create regulatory obligations, but insurance addresses civil liability if products cause illness or injury. Farm shops and direct sales need public liability coverage for customer visits. Tourism activities require higher liability limits ($5-10 million+) and specific tourism-related extensions.

Don't assume your standard dairy farm insurance covers diversification activities. Many standard policies exclude or provide limited coverage for commercial activities beyond basic farming. Notify your insurer of all diversification activities and ensure appropriate coverage extensions are in place before commencing new ventures.

Essential Risk Management for Dairy Farms

Active risk management reduces both insurance costs and actual losses. Implementing these strategies protects your dairy business:

Herd Health and Management

• Maintain comprehensive herd health programs with regular veterinary consultations
• Document all treatments, vaccinations, and health interventions
• Implement biosecurity protocols to minimize disease risks
• Keep detailed mortality records tracking causes and trends
• Ensure NAIT compliance with accurate, current records
• Manage body condition scores and nutrition to minimize metabolic diseases
• Provide adequate shelter and water during extreme weather

Infrastructure Maintenance

• Schedule regular dairy shed maintenance and equipment servicing
• Maintain fire detection and suppression systems where installed
• Inspect effluent systems regularly for leaks or failures
• Keep buildings weathertight and structurally sound
• Document all maintenance activities with dated records
• Address identified hazards promptly with remediation records
• Ensure backup power systems are tested and functional

Environmental Compliance

• Maintain farm environment plans current and implemented
• Monitor effluent systems for proper operation and capacity
• Follow resource consent conditions meticulously
• Keep nitrogen budgets and fertilizer application records
• Implement riparian planting and waterway protection
• Have spill response procedures and equipment ready
• Conduct regular self-audits of environmental compliance

Health and Safety Management

• Develop and maintain written health and safety policies
• Conduct regular hazard identification and risk assessments
• Provide employee training with documented records
• Maintain first aid capabilities and emergency procedures
• Ensure all equipment has appropriate safety features and guards
• Investigate incidents and near-misses with documented learnings
• Display emergency contact information prominently

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Quick Facts

Comprehensive dairy insurance typically costs $25,000-45,000 for 400-cow operations
Business interruption coverage is crucial for maintaining milk supply continuity
NAIT compliance often required for herd insurance claims
Optional biosecurity disease extensions now available post M. bovis
Bundling all coverage with one insurer saves 10-20%

Related Coverage

Frequently Asked Questions

How much does dairy farm insurance cost in New Zealand?

Comprehensive dairy farm insurance for a typical 400-cow operation costs approximately $25,000-45,000 annually in 2025, covering herd ($16,000), buildings ($9,000), equipment ($8,000), business interruption ($4,000), public liability ($2,500), and employers' liability ($3,000). Smaller farms (200 cows) typically pay $12,000-25,000, while larger operations (600+ cows) may pay $45,000-80,000+. Multi-policy discounts can reduce total costs by 10-20%. Costs vary based on location, claims history, coverage levels, and risk profile.

Does herd insurance cover Mycoplasma bovis or other diseases?

Standard dairy herd insurance does NOT cover routine disease, general illness, or government-mandated culling for biosecurity purposes. The M. bovis outbreak highlighted this gap, with many farmers facing uncompensated losses despite government compensation schemes. However, following M. bovis, some insurers now offer optional biosecurity disease extensions covering government-mandated destruction for specified diseases. These cost an additional 0.5-1.5% of herd value but provide crucial protection against future biosecurity events. If concerned about disease risks, ask your insurer about available disease coverage extensions.

What's the difference between sum insured and total replacement coverage?

Sum insured policies have a maximum payout limit you select when purchasing insurance. If your selected amount is insufficient to cover rebuild costs, you're underinsured. Total replacement (sum insured unlimited) policies automatically cover full rebuilding costs regardless of your initially selected amount, typically up to 120-130% of sum insured. Total replacement costs 5-10% more in premiums but protects against underinsurance from construction cost inflation or currency fluctuations affecting imported materials. For dairy infrastructure with complex rebuilding requirements and potential cost uncertainties, total replacement coverage provides valuable protection despite higher premiums.

How does business interruption insurance work for dairy farms?

Business interruption insurance compensates for lost milk income when insured events prevent normal operations. If your dairy shed is destroyed by fire, the policy covers lost income during rebuild periods (typically 3-12 months depending on coverage purchased), additional costs of emergency milking arrangements or temporary facilities, and extra expenses to maintain operations. Calculate sum insured based on average milk income over the indemnity period plus potential additional costs. A farm earning $1.2 million annually needs approximately $600,000 coverage for six months, plus allowances for extra costs. Ensure your indemnity period is realistic for rebuild timeframes given current supply chain constraints.

What should sharemilkers versus farm owners insure?

Typically, farm owners insure land, buildings (including dairy shed structures), permanent improvements, and fixed infrastructure. Sharemilkers insure their livestock (dairy herd and followers), machinery and equipment they own, and any portable improvements. However, gray areas exist around dairy shed equipment, portable facilities, and effluent systems. Sharemilking agreements should specify insurance responsibilities clearly. Both parties need public liability coverage as both face potential liability from farm operations. Contract milkers have different needs again - equipment and liability but usually no livestock. Ensure your insurance broker understands your specific arrangement to avoid coverage gaps.

Does dairy insurance cover environmental penalties?

Public liability insurance with environmental extensions typically covers accidental pollution cleanup costs and civil liability claims from affected parties, but does NOT cover regulatory fines or penalties. If you're prosecuted for environmental breaches, fines are your responsibility. However, cleanup costs following accidental effluent discharge, contamination remediation, and third-party claims for damage can be covered. Coverage requires you to be operating in compliance with resource consents and regulations - deliberate discharges or ongoing non-compliance typically invalidate coverage. Environmental liability limits should be $1-2 million minimum for dairy farms given potential cleanup costs.

Should I insure replacement stock and calves?

This depends on your risk tolerance and financial reserves. Many dairy farmers insure only the milking herd rather than all stock, focusing protection on the capital breeding animals most expensive to replace. Rising two-year-olds and replacement heifers can be added at lower per-head values than milking cows. Calves are typically not insured as their individual values are modest and mortality rates higher. However, for farms with high-genetic-value replacement stock or significant investment in heifer rearing facilities, insuring followers may be worthwhile. Calculate the cost of replacing your followers versus the insurance premium to determine value. Most farms find insuring the milking herd provides optimal cost-benefit balance.

How often should I review my dairy farm insurance values?

Review all insurance values annually at policy renewal. Building costs increased 25-35% from 2020-2025, equipment prices rose similarly, and cow values fluctuate 15-25% year-to-year based on dairy payout expectations. Using outdated values creates serious underinsurance. Review herd values quarterly as cow prices fluctuate seasonally - spring values often exceed autumn values by $300-500 per cow. Immediately notify your insurer when purchasing major equipment, completing building projects, or selling substantial assets. Consider professional revaluations every 3-5 years for complex infrastructure to ensure accuracy. Underinsurance means claim payouts may be proportionally reduced, leaving you with significant shortfalls.

What happens if my dairy shed is destroyed during the season?

Business interruption coverage addresses this scenario. The policy should cover lost milk income during repairs/rebuilding, costs of emergency milking arrangements (portable milking facilities, using neighbor's dairy shed, contract milking arrangements), transport costs to alternative facilities, potential milk dumping costs if unable to meet quality standards, and additional labor for emergency measures. Some policies include accelerated rebuild costs - premium costs for priority construction to minimize downtime. Without business interruption coverage, you bear all these costs plus lost income potentially exceeding $500,000 for major damage. Ensure your indemnity period (3, 6, or 12 months) reflects realistic rebuild timeframes and that sum insured covers both lost income and additional costs.

Can I get insurance if my farm is in a flood-prone area?

Yes, though coverage terms and costs may differ. Properties in designated flood zones may face premium loadings (10-30% increases), higher flood-related excesses, or in extreme cases, flood exclusions for buildings. However, livestock and business interruption coverage generally maintains comprehensive flood coverage as these cannot practically be excluded in New Zealand's climate. If you've implemented flood mitigation (improved drainage, raised infrastructure, flood barriers), inform your insurer as this may moderate premium impacts. Shop around as different insurers have varying risk appetites for flood-prone properties. The 2023-2024 weather events have increased insurer scrutiny of flood risk, making early discussion with brokers important if in flood-prone areas.

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