Essential greenhouse insurance coverage: Protecting your crops and facilities

Photo © Adobestock

Greenhouse businesses face myriad threats, from storm damage to crop loss to equipment breakdowns. Put simply, it’s not a matter of “if,” but “when” something will happen, meaning growers must take steps to protect themselves from the inevitable. Greenhouse insurance is vital for owners keen on protecting their livelihoods, according to a trio of providers. A comprehensive plan will cover your greenhouse, protect your plant and equipment inventory and safeguard against potential business disruptions. Ultimately, insurance is a must-have safety net for the long-term stability of your crops.

Chris Hayes, executive vice president, Professional Insurors

Douglas Guth: What are the key risk factors unique to greenhouse production that must be considered when underwriting a policy?

Chris Hayes: Greenhouses present a unique challenge to insurance carriers as a whole, especially in storm-prone states. Unlike most types of property, greenhouses have inherent structural vulnerabilities due to the nature of their construction. Greenhouses are also more susceptible to fire loss because of their plastic coverings. Often, insurance carriers will refuse to cover greenhouses, or they will only cover them on an actual cash value basis, which is replacement cost minus depreciation and the policy deductible.

DG: What types of insurance coverage do you recommend for greenhouse growers? 

CH: If the grower wants to insure the greenhouse, this is where we start. Next, insurance for all the equipment used in their operations is essential, especially expensive or leased equipment. Crop insurance is also implemented, which covers the loss of crops to weather-related events, disease or equipment failure. Business interruption insurance is essential as well, because it provides income in the event of a covered-loss fire or equipment failure.

DG: What are the top three questions a grower should ask when choosing an insurance company?

CH: The breadth of coverages available, the financial standing of the insurance carrier and the cost of the policy.

DG: What are the top questions an insurance representative should ask a grower in search of a policy?

CH: Carriers always look at three main components when underwriting a grower’s operation: the loss history of the operation, a grower’s years in business and operational controls in place that mitigate the probability of loss.

DG: How often do you recommend greenhouse growers review their insurance policies, and what triggers should prompt a review?

CH: Business owners in all industries should review their coverages and limits annually. For growers, triggers include significant upticks in business, employee hires or any expansions to their business.

DG: What are some basic best management practices to follow when making a claim?

CH: You can never have too much documentation: photos, written narratives, witness statements, receipts for equipment and more. This assists the claims adjuster in adjudicating the claim as accurately as possible. 

David Macari, GrowPro program manager, NIP Group

Douglas Guth: What are the key risk factors unique to greenhouse production that must be considered when underwriting a policy?

David Macari: Greenhouse operations face unique exposures, including structural damage from natural weather events, equipment breakdowns and stock loss. These specialized risks require insurance solutions that are tailored to the greenhouse industry, with coverages that recognize greenhouse vulnerabilities.

DG: What types of insurance coverage do you recommend for greenhouse growers?

DM: For typical risks, recommended coverages include general liability such as limited pollution liability and cyber coverage. You should consider blanket building coverage if a location has multiple buildings, and all properties are insured to value. An excess liability policy will provide an additional level of protection.

DG: What are the top three questions a grower should consider when choosing an insurance company?

DM: Does the insurer provide insurance for all types of policies and coverages? Does the insurer specialize in vertical growing/hydroponics/aquaponics and greenhouse horticultural risks or simply offer general business coverage? Does the company provide risk inspection servicing, have effective and timely servicing and have an experienced claim and management team?

DG: What are the top questions an insurance representative should ask a grower in search of a policy?

DM: What is the focus of your business: types of plants, flowers, produce grown and more? Where are your locations, and how long have you been operating? What are you looking for in a carrier, compared to what you currently don’t have today?

DG: How often do you recommend greenhouse growers review their insurance policies, and what triggers should prompt a review?

DM: At minimum, it is recommended that greenhouse growers review policies annually or any time there’s a material change, such as expanding facilities or adding new properties or equipment.

DG: What are some basic best management practices to follow when making a claim?

DM: Document and report incidents immediately, while summarizing the damage with photos, notes and security videos. Be sure to secure the affected area to prevent further loss, and keep detailed records of all communication and mitigation efforts.

Shawn Brown, CEO, LLK Greenhouse Solutions

Douglas Guth: What are the top three questions a grower should consider when choosing an insurance company?

Shawn Brown: Obviously, you should be asking what types of coverage are on offer. You should also look at the insurer’s ratings — it’s very important to know who you’re insuring with and if it’s a stable company. The list of companies is shrinking, due to large claims after natural disasters and other problems. What kind of history does the company have in this space? When you have new players in the business, they may not understand seasonality or the importance of moving quickly to help adjust a claim.

DG: How often do you recommend greenhouse growers review their insurance policies, and what triggers should prompt a review?

SB: Reviewing your policy has never been more important due to price pressures around COVID, and now inflation and tariffs. I’ve dealt with customers who have not updated their policy in decades, so they run into all the problems that go into being underinsured.

DG: What record-keeping practices do you recommend to growers to ensure accurate and efficient policy management?

SB: Any time there’s an expense, a trigger should go off that you’ll send to your insurance company. In addition, you should be reviewing your equipment and property costs every year. Or if a piece of equipment ages out, are you replacing it with a new, high-dollar piece of equipment? These are all important things to track.

Douglas Guth is a freelance journalist based in Cleveland Heights, Ohio. Contact him at douglasguth@gmail.com.