Wholesale Plant Growers, Retailers, Distributors & Others Have New, Crucial Insurance Options

ANLA’s – or the American Nursery and Landscape Association – endorsement of Live Asset Insurance means good news and great options for the nursery industry, including wholesale plant growers, and for the landscape industry.

This new partnership is quite simple. Live Asset offers coverage for nursery, greenhouse, landscape and retail plants against extreme and damaging weather occurrences. ANLA is a group of thousands of green-industry businesses left to self-insure for natural disaster damage or left to rely on the federal government’s crop insurance program that isn’t able to provide full coverage. (more…)

Tree farm damage from high winds. Federal crop insurance does not cover standing timber.

David Teed, Managing Director of Live Asset Insurance, describes the ins and outs of crop insurance services 

Federal crop insurance is not as cut-and-dried as you might think. The fact is, other protection is available for crop insurance brokers to offer their clients to fill in the gaps where government crop insurance services fall short. David Teed, Managing Director of Live Asset Insurance, answers a half-dozen questions on the nitty-gritty of federal and private crop insurance.

Q: What is the relationship between Live Asset insurance and federal crop insurance subsidized by the government? 

David Teed: Live Asset was created to fill coverage gaps left by the federal crop insurance and to compete directly as a private company rather than a subsidized one. Congress mandates they not compete when a private enterprise offers comparable coverage. The government program is used as a means to protect against catastrophic loss, but most buyers are self funding the majority of the loss and simply enriching the brokers selling them the policy. Taxpayers and the growers are footing the bill for coverage that rarely gets used, leaving everyone but the brokers upset. 

Our policy is a named perils death and destruction policy, meaning we only cover those perils named in the policy that kill or destroy the plant to the point it will likely die in the near future. National crop insurance offers “all risk” coverage which means they cover everything except that which is excluded. The exclusions make our crop insurance services comparable in many ways at the end of the day.  

Q: What is the practical benefit of obtaining the coverage provided by Live Asset coverage? What is unique about the crop insurance services Live Assets offers? 

DT: The practical benefit is that now growers can eliminate the huge gaps in coverage to protect their bottom lines and find coverage for plants that the federal crop insurance program has excluded. Growers whom are patriots and believe in self reliance will embrace our policy as a means of doing their part to reduce the national debt! There is no other source in the country currently offering our coverage, making us unique and exclusive as a private crop insurance program. 

Q: Are there some plants that federal crop insurance doesn’t cover that Live Asset insurance does?  

DT: Crop Insurance excludes vines and Christmas trees to name only two items, but these are major items for us. National crop insurance excludes vines and we are the only source in the country that insures the vines. Our policy is also unique because we can insure up to $250 dollars per vine which allows the grower to replace their destroyed vines with new roots/vines, but receive full replacement value payment for the loss. 

How can the government exclude Christmas trees?  They do not cover standing timber. They also do not cover containerized trees over a certain gallon size…300 gallons. But we will. We have no such limitations or conditions on garden centers that have a grow field where they derive over 50 percent of their income from the retail center; the government will not insure their operations. There is no federal crop insurance coverage for trees growing on residential or commercial properties not held for sale to the public – like a golf course or cemetery or zoo. They require clients to perform tasks for coverage to apply like lay down plants before a storm and cover them with pine straw, we have no such limitations. 

We are only writing in 19 states at this point, but we hope to pick up a lot more when the government starts to back away from competing against us as a private carrier. There are other issues I am learning everyday causing me to realize that the government program is not the answer for many agricultural citizens.

 Q:  If someone has both federal crop insurance and Live Asset insurance, how do those two areas of coverage interact should a claim be filed? 

DT: If someone has both policies, it depends on if the government is excluding the coverage, like on vines! Then there is no coordination, but if they are insuring only catastrophic coverage under the government policy then ours is primary and the government is excess. Typically we will know what the coverage is before hand and we will insure the total insured value (TIV), but only insure the primary portion not covered by the national crop insurance policy. 

So, if someone had 10 million trees held for sale in a nursery and they had a policy with the government covering 55 percent, we would insure the 10 million but discount the price by a factor using excess coverage discounts because we will not pay the full 10 million (as 5.5 million is covered by the govt). Our policy would be primary on the first 4.5 million replacing the growers self funded exposure. 

Q:  How about cost? Federal crop insurance is subsidized by the government. Wouldn’t other coverage be more expensive? 

DT:  Our policy is about 50 percent less than the government policy, apples-to-apples. But you are right that no private enterprise can compete with a taxpayer based subsidized program that does not have to turn a profit! We offer primary coverage for owners when the government makes them pay first dollar before they kick in a penny. 

Q: In your opinion, what are the main areas of misunderstanding or confusion when it comes to Live Asset insurance and crop insurance brokers? Why should crop insurance brokers offer Live Asset insurance to their clients? 

DT:  Crop brokers who care about their client’s exposure will tell you that a federal crop insurance policy is not worth the paper it is printed on, but they do not want to reduce their income of 17 percent commission from the government policy and take about half that amount from us. This is short sighted because the client can come to us directly and they will lose it anyway. Or another broker who is targeting their client can offer our protection as a solution and they can lose it to another broker. Or they can do the right thing and reduce their income from the taxpayers on a policy that they do not believe in and sell our policy as a blend with the federal crop insurance program. We want to reduce the nursery tax burden by billions.

Part of the challenge of marketing a new product is letting people know that the product is available.

Even though Live Asset has been creating waves in the Insurance and Green industries for over two years now, there are still so many end users that could benefit from our services, who would want to have the protection that we offer, but they just do not know that we exist. We fear that our policies are, for too many, a wishful pipe dream that is an unknown reality.

Complicating the challenge is the adoption and internet use of some of our target audiences. Live asset insurance is great for:

• Nurseries and Growers
• Tree Farms
• Golf Courses
• General Farming
• Insurance Brokers
• Homeowners with landscape exposures
• Greenhouses

But reaching out to some of those markets is the real challenge!  

Using the internet is great, but if you look at social demographics for things like social media and internet use, there rises the difficulty of this medium. 

 The average age of farmers in 1997 was 54.3 years. The proportion of farmers age 55 and over rose from 37 percent in 1954 to 61 percent in 1997 which indicates that our farmers are continuing to get older as a population demographic.  While some internet places like Facebook report that older age groups are growing rather fast, in actuality it seems that while people join, they don’t often come back often enough to become actual users of the mediums.  In general studies have found that that the use of the various social networks decline with age: 10 percent of those aged 55 to 64 and just seven percent of those aged 65 and older.

Sadly, that’s our traditional US farmers right there: not using the intenet.

An organic and eco friendly small farmer, by contrast, seems to be represented by a younger, upcoming generation who is much more comfortable online, but often is still in the beginning stages and not always aware of the benefits of serious risk management, yet. The green industry is well represent on various internet services for networking such as Twitter and blogging, but sometimes then, this groups on a whole seems to have an inherent mistrust of “big business” type industries.. like insurance.

The Wineries are comfortable online to sell wine. Some with our greenhouses and other nursery industries…

And so, we ask you: You are here, you have found your way to us and hopefully you represent one of the many industries that may be interested in Live Asset Insurance. So, where do YOU go online? What is your source of information for you and your peers and, while we are at it, how to we get there?

New Live Asset Crop Insurance Protection coming soon!

This is exciting news for farm managers and the crop brokers who insure them!

The only overall complaint we hear at Live Asset Insurance from prospective clients and their crop brokers is that our minimum premium is just too high for them to afford. There are thousands of mom and pop farms that have live asset exposures, but can’t afford the $5,000 entry fee. We heard you and we have been trying to find a way to get around this issue.

Bundle Your Assets, Protect your Crop Exposures

We hope to announce shortly that smaller live asset exposures can be written on a single “bundled” property policy for the owner, operator, manager or broker for a smaller sized or niche farms.  Our legal department is finalizing the 19 state offerings.

Qualifying farm managers must control the farm operations and be contractually responsible for the protection of the plant material. We will require management firms to enforce our inspection standard of care so quality random sampling can be done to keep our inspection costs low.

This will apply to all live asset crop and farm managers:

• Vineyard
• Nursery
• Greenhouse
• Orchards
• Tree Groves
• Golf Course
• Botanical Gardens
• other growing plant material exposures.

We expect to officially announce this in the next few weeks, so stay tuned

Live Asset Insurance and Tanenbaum-Harber Co. Inc www.tanhar.com, ranked among the top 25 largest Insurance /Risk Management firms in the country, have joined to offer the nation’s most unique property policy insuring trees, shrubs, annuals, perennials and vines. Live Asset Insurance is the only private “crop insurance” product endorsed nationally by ANLA, American Nursery Landscape Association www.anla.org. Policies are written exclusively through Live Asset Insurance either directly with clients or through approved brokers in 19 states. Live Asset Insurance began in 2007 in response to inadequate insurance for living plant material destroyed by extreme weather events.

David J. Teed, CIC Managing Director of Live Asset Insurance www.liveassetinsurance.com states; “We are pleased to join the T&H Group, and we look forward to benefiting from their size, strength and unparalleled back-office support. Currently crop brokers, insurance carriers, program administrators, farm managers, insurance associations, nurseries, greenhouse growers, vineyards, golf courses, timber trusts, lenders, brokers, agents, CPA’s and many other sources secure our insurance for their clients. Insurance on trees, shrubs, vines, annuals and perennials; with replacement limits up to $10,000,000 for freeze, fire, wind, hail, lightning, flood, weight of ice and snow, theft, vandalism, and other perils, is unlike any other product in the marketplace. No private insurance source offers broader perils or higher limits, or has a more experienced team of arborists, horticulturists, floriculturists, viticulturists or foresters in the field than Live Asset Insurance.”

Live Asset Insurance also enjoys an exclusive relationship with HMI, Horticultural Asset Management www.hmiadvantage.com, who offers inspection, appraisal, valuation and claim support services. Doug Cowles, HMI’s President and CEO states;” We are thrilled to be supporting Live Asset Insurance and believe that the T&H Group relationship will significantly enhance the program. HMI’s proprietary valuation system and expert field network were designed to support Live Asset Insurance, by providing a “Kelly Blue Book” standard for valuing trees, shrubs, vines, annuals and perennials for their replacement value and health condition.”

“HMI’s database consists of replacement values of over 750,000 different plant materials and remarkably, they have the ability to determine the health condition of each listed item. This information allows Live Asset Insurance to provide the “green industry” with an insurance policy that provides real protection against extreme weather events.”  

For more details contact:

David J. Teed, CIC
Managing Director
Live Asset Insurance
www.liveassetinsurance.com
dteed@liveassetinsurance.com
800-644-0178

Edward O’Hare over at The Rough Notes Company Inc. wrote a wonderful piece on Live Asset Growers Insurance for the October 2008 publication of their online and print Rough Notes magazine:

Rough Notes is a great trade communication for the insurance industry, so having this coverage is a wonderful way for us here at Live Asset Insurance to be able to get the word out. With such a new, but necessary and worthwile,  insurance program the biggest challange has been getting the people who would require such vital natural disaster insurance coverage for their nurseries, tree farms, and landscaping especially in the wake of all these distrubing climate changes.

This article should prove to be an excellent resource allowing us to explain what we do and the value of Live Asset Insurance at a glance. It’s worth a read especially if anyone has the slightest bit of confusion over what we do and how we do it. Just follow the link below to access the whole article:

Protecting Clients’ Live Assets -New Insurance Program Covers the Substantial Values of Trees, Shrubs and Plants

Thanks to Ed and the folks at Rough Notes!!