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Insurance Available For Empty Hog Barns

Pork producers who want to idle their hog barns until market conditions improve can now get insurance designed especially for empty facilities.

Lakeview Insurance Brokers Ltd., together with five insurance companies, have developed an insurance package to cover hog barns while they stand vacant. It became available this week.

The package will accommodate farmers enrolled in a federal program which will compensate them for mothballing their pig barns for at least three years. The recently announced program, which is not yet in effect, aims at stabilizing markets by reducing the national hog herd. Details are expected shortly.

But producers do not have to be involved in the national program to qualify for Lakeview’s insurance package, nor do they have to idle barns for three years.

Coverage is for a 12-month term and renewable. The premium to insure an empty barn could be up to 40 per cent less than for a full one.

“We are trying to fill what we perceive to be an ever-growing need right now in the marketplace for a specialty product,” said Tim Friesen, Lakeview’s vice-president of marketing for agriculture.

“It’s an option for a producer to look at as opposed to what he currently has.”

He stressed that the program is seen as interim and Lakeview expects most insured barns to reopen eventually.

Hog barns in Manitoba are emptying rapidly as producers find it more economical to idle their facilities than continue losing money operating

“We are trying to fill what we perceive to be an ever-growing need for a specialty product.”

– TIM FRIESEN, LAKEVIEW INSURANCE BROKERS

them because of low prices and high costs.

Anecdotally, up to 100 barns have been emptied in the province over the last two years, said Friesen.

Insuring an empty barn can be difficult because most current policies don’t envision that sort of thing, he said.

“The insurance that they have assumes that the barn is in production and being occupied and attended to on a daily basis.”

Altering the operation of a hog barn is called a material change in risk which directly affects the insurance policy. It’s like selling jewelry one day and switching to fireworks the next, Friesen said.

He said it’s critical for producers emptying their barns to let their insurance companies know ahead of time because “they may decide the policy has to be changed as a result of that.”

If the producer fails to notify the company, it’s “highly likely” the company would refuse to honour any claim that might occur.

A company may agree to insure an empty barn but it’s not a sure thing. That’s the reason for this special package, according to Lakeview.

“A vacant hog barn is not a target market for anybody. We just want to be able to give a really good option to people that are looking for something like that,” said company senior vice-president Sid Reimer.

The package designed by Lakeview insures producers against fire and weather-related damage but not vandalism.

Producers must meet certain criteria to be eligible. They must also follow prescribed protocols: turning off electrical panels, maintaining rodent control, etc.

Producers will be required to monitor buildings regularly and keep a log of their visits, which must be available to insurers on request.

More information can be obtained by phoning Lakeview Insurance Brokers at (204) 453-0106 in Winnipeg. [email protected]

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