Things to Consider about Buying Avian Influenza Business Interruption/Loss of Income Insurance August 2015

  • Make sure the policy will cover all types of Highly Pathogenic Avian Influenza as determined by the U.S. Department of Agriculture. There are more than 100 different possible avian influenza subtypes (16 possible H subtypes and 9 possible N subtypes) that change and re-combine regularly, just like human influenza viruses. Policies that limit coverage to just a few named avian influenza subtypes might not cover you adequately.

  • Learn if the policy will cover introduction of Low Pathogenic Avian Influenza. On Delmarva, there will be depopulations and control areas if Low Pathogenic Avian Influenza is detected. There is a U.S. Department of Agriculture definition of Low Pathogenic Avian Influenza.

  • Make sure your policy will provide business interruption coverage if your farm HAS NOT contracted an avian influenza virus, but has a loss of income because there are delays in placing new flocks once your mature flock is taken to processing. If avian influenza is detected on Delmarva, there will be delays in flock replacements in the control area until the control area around a virus-positive farm completely has been emptied and it is determined there is no virus in the control area. Farms in this control area often are referred to as "wrong time/wrong place" farms because of no fault of their own they will have delays in chick placements.

  • If you grow chickens that are given access to the outside, you might be disqualified from buying insurance coverage. Check with your insurance agent about this exclusion.

  • Make sure you understand whether the coverage is a true loss of income policy or whether it just covers expenses incurred during the avian influenza episode.

  • Learn exactly what type and amount of income loss will be covered by the business interruption insurance. Ask if you automatically will receive the maximum amount of coverage or will you need to submit proof of income loss and/or on-going business expenses. Make sure you understand the types of documentation you will need to provide to submit a claim.

  • Do some calculations to determine if your policy premium will cost more than the insurance reimbursement claims you might receive. If claims have to be documented based upon on-going expenses, calculate items such as mortgage payments, taxes, wages, other types of insurance for the farm, utilities, and other businesses expenses. Understand exactly what types of expenses will be covered.

  • Ask if the policy is good just for one avian influenza episode during the coverage period or whether multiple episodes will be covered.

  • Since insurance premiums generally are based upon risks, learn if your on-farm biosecurity practices be reviewed prior to a policy being issued.

  • If avian influenza virus is found on your farm and your birds are ordered depopulated by the government and you receive some flock payment from your chicken company, understand how that will impact your insurance coverage.

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