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Plantation insurance
Plantation insurance is one of the more specialised classes of insurance and AgriRisk is one of the few independent insurance broking operations with the expertise to manage Rewards Project’s diverse plantation insurance needs.
Under the terms of each Rewards Project, insurance is optional for most paid-up (cash) growers, and compulsory for growers electing to utilise a terms arrangement, and growers who have invested in the Rewards Group Teak Project 4 or Rewards Group Sandalwood Project 5 (as either a cash applicant or a terms applicant). Rewards Projects and the independent forester encourage all growers to insure their woodlots or groves. Whilst the risk of significant loss is not great, the insurers consider the cost of insurance to be far less than the associated risk.
Growers who choose not to insure their woodlots or groves therefore do not participate in the insurance policy. In the event of a loss, they may not receive any proceeds and they may not be entitled to share in the pooling of proceeds in respect of the affected woodlots or groves. Over the past few years AgriRisk has developed plantation insurance to the extent that cover is now available for fire, aircraft, hail and windstorm leading to tree death. (Cover is in place in respect to standing trees only).
Fire risk and related cover
Fire is a natural phenomenon. Over the years, plantation owners and managers have endeavoured to control and minimise the risks and impact of fire. Whilst Rewards Projects implement strategies to reduce the frequency and intensity of fires within plantations, there is still a risk that fires will enter from neighbouring land. Additional cover has been negotiated to incorporate damage from windstorm, and fortunately this has caused little increase in insurance premiums. Insurance of this nature is considered not only appropriate but highly beneficial because, as growers’ plantations mature, they are at risk of sudden intense windstorm events. It’s worth noting that cover is sub-limited to 25% of the sum insured per woodlot or grove.
In the event of a plantation being damaged or destroyed, advice will be given immediately to insurers and a loss adjuster will determine cost in accordance with the policy. A detailed assessment of the loss will be carried out as soon as practicable after the event and claims are payable on the basis of the agreed value per hectare of the area damaged, less any salvage and the deductible. One type of cover in this field is a fire and nominated perils policy, which safeguards against loss or damage to trees as a consequence of rainfall, shortage or surplus. Disease, pest and accidental damage (such as chemical over spray) may not be insured, and there is often no cover for losses of market, reduction in yield or fall in price, so check with your provider.
In the event of a bush fire or other hazard that results in crop loss or plantation damage, it’s important to have the correct cover in place, as this is a fairly specialised insurance area. An insurance provider with the necessary experience in this specific field will generally be of much greater use than one with no previous track record.
