What Is Covered by Livestock Insurance?

Livestock insurance is a specialized form of financial protection designed to safeguard owners from unexpected losses related to their animals. It serves as a crucial risk management tool for farmers, ranchers, and other animal owners, helping to mitigate the inherent financial uncertainties associated with livestock ownership.

This type of insurance helps ensure continuity of operations by providing financial support when unforeseen events impact animal health or life, protecting investments and potential income derived from these animals.

Understanding Covered Perils

Livestock insurance policies cover specific events, or “perils,” that can lead to financial loss. A primary focus is mortality coverage, protecting against animal death due to various causes. Covered perils include accidents, such as those occurring during loading and unloading, accidental shootings, or collisions involving vehicles. Injuries necessitating humane euthanasia are also covered.

Policies extend to losses from attacks by wild animals or dogs. Natural disasters are a common inclusion, covering events such as:
Lightning strikes
Floods
Earthquakes
Severe storms
Windstorm
Hail

Theft and vandalism are additional perils covered, providing protection against intentional acts. Some policies may cover specific incidents like electrocution, structural collapses, or debris from falling aircraft.

Animals Typically Covered

Livestock insurance policies cover a wide array of animal types, reflecting the diverse nature of animal agriculture and ownership. Common farm animals are insurable, including:
Cattle
Horses
Sheep
Goats
Swine
Poultry

Coverage extends to various purposes, including breeding stock, dairy animals, or those raised for meat and fiber. More specialized categories of animals are also covered, addressing the unique needs of different operations. This includes exotic animals such as:
Elk
Bison
Llamas
Alpacas
Zoo animals
Aquatics
Reptiles

Aquaculture, involving the farming of aquatic organisms, can also be insured, covering stock mortality and other risks in both marine and freshwater environments. Depending on the policy, coverage can be structured for individual high-value animals, specific herds, or a blanket policy covering all animals on a farm up to a per-animal limit.

Policy Types and Exclusions

Livestock insurance policies are structured with common types including “named peril” and “all-risk” coverage. Named peril policies specify the exact events or causes of loss covered, such as fire, lightning, or theft. An “all-risk” policy covers any cause of loss unless specifically excluded in the policy language. While offering broader protection, “all-risk” policies still contain defined exclusions.

Valuation of animals for insurance purposes is determined in a few ways. For individual high-value animals, a “stated value” or “agreed value” policy is used, where a specific amount is agreed upon at the policy’s inception. For herds, coverage is based on actual cash value or market value at the time of loss. Some policies offer “blanket” coverage for all livestock up to a certain amount per animal, such as $5,000, or “herd” coverage for a specific group.

Livestock insurance policies contain common exclusions that limit what is covered. Pre-existing conditions, which are health issues or symptoms present before the policy’s effective date, are not covered unless specifically endorsed. Losses due to neglect, improper care, or intentional harm by the owner are excluded. Policies may exclude losses from preventable diseases if specific protocols, such such as vaccinations, are not followed. Natural causes or old age are excluded unless a specialized mortality policy is purchased.

Filing a Claim

When a loss involving insured livestock occurs, prompt action is necessary to initiate the claim process. The owner should immediately notify the insurer or their designated representative, often through a 24-hour contact number provided by the policy. Contacting a veterinarian is a critical next step to assess the animal’s condition and determine the cause of loss, which is essential for documentation. Thorough documentation of the loss, including the date and time of the incident, is important.

To support a claim, several documents are required. A veterinary disease report, completed and signed by an authorized veterinarian, is mandatory to certify the cause of death or injury. Photographs of the deceased animal, clearly showing identifying marks like ear tags, are requested. Proof of ownership, such as a certificate of ownership, and a completed claim for indemnity or loss report form are necessary.

After gathering the required documentation, the claim can be submitted through various channels, including online portals, mail, or direct phone calls to the insurer. The insurer will then conduct an investigation, which may involve reviewing the submitted documents and potentially sending an adjuster to assess the situation. The assessment of damages and the payout timeline can vary depending on the complexity of the claim and the policy terms, but payments are processed within a reasonable timeframe once all conditions are met.