One of our agribusiness clients who owns/operates over 50,000 h.a in NSW, notified us of a major incident, uncertain as to whether or not it was an insurance related event.
One of their employees had accidentally collided a sprayer machine with their 900m lateral irrigator. Although the employee wasn’t injured, there was significant structural damage to the sprayer and to the lateral irrigator. It was evident they would be out of operation for some time.
Whilst we anticipated the repair costs to be approximately $100k, the bigger concern was time. Both machinery items were critical for continuation of farming. Being harvest time, yields would be significantly impacted if sprayer and irrigator were not operational within a few days.
The expected loss of yield was over $1,000,000.
Due to the timing of the incident, the client’s other sprayers and lateral irrigators were already in use.
We needed to hire in sprayers and irrigators while repairs were underway to the damaged units. Time was critical. Every day lost, impacted the harvest potential of the site.
As the Broker, we had anticipated this potential risk and incorporated into their insurance program to ensure limited associated downtime on farming continuation.
Specifically, we designed the insurance to guarantee there was coverage for damage caused by an employee error, to mobile plant and equipment out on range. We then expedited expenses associated with urgent repairs.
The key insurance design element was securing the consequential loss, cover for the additional expenses to hire plant and equipment, as well as third party contractors where our own client’s resources were already occupied.
Cover and insurance design while crucial, actioning the claim swiftly and managing all components for our client was pivotal.
Within two days of the incident, we had secured several quotes for the hiring of the equipment and obtained insurer approval to proceed with our preferred contractor.
- Repairs were undertaken immediately, yet took 6 weeks and $113,000 in costs (sprayer $68k, lateral irrigator $45k).
- The additional costs to outsource their spraying totalled $195,000 over this period.
- The client’s yield for that harvest was achieved, and we obtained important knowledge on various repairers and plant contractors for this region if a similar incident were to occur again.
- The policy responded in full.