If you remember correctly, Luke in “Cool Hand Luke” always ended up on the wrong end as result of a “failure to communicate”. The following are two examples of livestock producers who also ended up on the wrong end as a result of communication break-downs between the producer and insurance agent.
Example No. 1:
A custom hog feeder lost 3,000 head of hogs to suffocation when the power failed in a hog confinement. The owner of the hogs filed suit against the feeder for the value of the hogs and the feeder filed a a claim under his farm liability policy. Unfortunately, the insurance policy excluded liability coverage for the loss of custom fed livestock. The insurance agent knew that the feeder custom fed hogs but the feeder requested insurance identical to his prior policy, which was through a different company and different agent. The prior policy also excluded liability coverage for custom fed livestock.
Example No. 2
A cattle producer owned a large livestock confinement building for feeding and housing cattle. During a large storm in December 2009 the roof collapsed due to the weight of accumulated snow. The producer’s general farm policy did not cover the confinement building for damage caused by “collapse” although the house and detached garage were covered for collapse. The producer was forced to file suit against the agent who was a long-time friend and had maintained the coverage on the farm for several years. The producer felt that agent should have included the collapse coverage considering the agent’s understanding of the operation and the importance of the confinement. The agent represented that collapse coverage was requested for the house and detached garage but the confinement was never mentioned.
Without question, the agents in both cases could have been more diligent and asked better questions. However, the livestock producers were the ones on the wrong end of the insurance company’s denial. Therefore, an operator needs to be overly-attentive with understanding his/her needs, requesting the insurance, and following-up with the agent to ensure the operation is properly insured.