Bird flu outbreak highlights need for farm coverage

Bird flu outbreak highlights need for farm coverage | Insurance Business

Bird flu outbreak highlights need for farm coverage
An outbreak of avian flu at an Ontario farm continues to be investigated by the Canadian Food Inspection Agency, and highlights a need for a coverage often overlooked by farmers.

Over 14,000 ducks had to be euthanized after it was confirmed they had contracted H5N2 avian influenza on Jul 10. The St. Catharines-area farm remains under quarantine, along with poultry farms within a three-kilometre radium.

It’s a loss of business that can be covered by the right insurance says Mike Brine, agribusiness specialist at Trillium Mutual Insurance Company.

“There is a coverage that’s available from several different insurance companies, that we’ve been offering, that would pick up from these issues. Avian flu is one for poultry, though it’s not commonly used in the industry yet,” he says.

While the CFIA covers the cost of any birds that are ordered to be destroyed, says Brine, farmers are often at a loss as their value greatly depreciates after the outbreak.

“If you had the birds in your barn and you had them there for a week and they break, they’re be worth very little than what they were worth when they went in,” he says. “CFIA will only cover what they’re worth at that time. This would cover what those birds would be worth at market.”

He adds that business interruption is included in the policy, an important feature for farms that can’t operate for a lengthy period of time due to a quarantine, and must face costs associated with recovery.

“In the event of a layer operation, you can buy coverage that would cover the fact that you won’t be shipping any eggs; CFIA will not cover that because it will only cover what the birds are worth on that day,” he says. “Then, it also covers the cleanup of the barn. The birds need to be composted usually on site - they try not to take them off-site because they don’t want to risk spreading the disease anywhere. Then the barn has to be fully disinfected as well, and that can run into quite a few dollars by the time you’re done.”

It’s been a busy year thus far for farm claims Brine adds, as fire and wind-related events take their toll on farms.

“It seems to be a more active year this year than it has been in the past; from our standpoint, the avian flu has been a really small part, but we’ve been seeing a few fires, more than what we’ve seen in previous years, there’s been wind damage and there’s been flooding damage as well,” he says.

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