Dear Valued Interested Persons,

Yesterday a Tornado killed Livestock in Victoria – video of Tornado here

The Livestock lost are likely to be claimable under the Fire and Perils section of a Farm Pack insurance policy.

A Peril is an event, like a Fire or Break-in, that may cause damage to buildings or belongings.

Traditional insured Perils are as follows:

  • Fire, Lightening, Hail, Windstorm*, Earthquake, Water Damage, Explosion, Theft, Accidental Damage (AD):
    *The policy definition of Windstorm is likely to include Tornado & Hurricane – similarly the definition of Earthquake may include Volcano

The point being all major Perils are insurable being, Fire, Water related events (Storm, Hail, Flood), Earth movement events (Hurricane, Volcano) with the exception of Drought.

In navigating an insurance policy it is prudent not to overlook a number of items, least of all:

  • The Insuring Clauses;
  • Definitions (defined terms within the policy which are generally in bolded text);
  • Exclusions (limitations of cover);

Broadly speaking the Insuring Clauses state which events are covered / insured by the policy, the Definitions will seek to clarify what falls within the scope of an ‘insurable event’ and the Exclusions seek to articulate what the policy, importantly, does not cover.

This then leads us back to why Australian Farmers cannot insure Cattle for Drought when all other major Perils are insurable?

Australia requires a Livestock Drought insurance policy, similar in principal, to the retracted Multi Peril Crop Insurance (MPCI) market we have for crops as evidenced below – source Grain Growers:

NB: Latevo have formed a Mutual which OBA Consulting has previously referenced:

Accordingly OBA Consulting continues dialogue with local Insurers, The International Livestock Research Institute (ILRI) in Kenya and the Australian Government / North Queensland Livestock Industry Recovery Agency (NQLIRA).

(After that mouthful above I think I have AO ((Acronym Overload)) 😊)

Please refer to the following video highlighting the nonexistence of Drought insurance for Livestock among the most common insured Perils in Australia: video

Any questions, noting OBA Consulting does not provide any advice to the general public whatsoever in relation to general insurance products, feel free to contact us.

For ANZIIF (here we go again…………… Australian & New Zealand Institute of Insurance & Finance) accredited insurance training courses written and delivered locally and internationally by OBA Consulting click here