Canadian farms can look completely different in five years than they did at the last renewal - bigger, more complex, and passed to a new generation - and in both cases, the risk most likely to catch owners off guard is the same one, according to Greg Laidman (pictured), AVP of national farm portfolio at Co-operators: a policy that hasn't kept up with the operation underneath it.
Laidman said the risk profile of Canadian farms has grown steadily more complex and volatile in recent years. Farms are evolving quickly. Operations are getting larger, introducing more moving parts, and with that comes more volatility in the underlying risk. Weather has become a central driver of that shift.
"One of the biggest shifts is the increase in both frequency and severity of weather-related events," Laidman said. "We see things like flooding, hail, drought, wildfire – all those things are happening more often, also in a less predictable way."
At the same time, farms have become more capital-intensive, adopting more technology and more sophisticated systems, which drives up equipment costs and, with them, replacement costs. That combination is putting more weight on getting valuation right than ever before.
"That's really increasing the importance of valuations and making sure that we've got the proper coverage," Laidman said. "Coverage review frequency and accuracy is more critical than ever."
Asked directly whether the average farm client is adequately insured today, Laidman didn't dodge the question, but focused on where the responsibility sits. "In many cases, there likely is still a gap," he said. Policies don't always keep pace with how quickly farms reinvest in themselves, he said, and newer risks – reliance on digital systems, interconnected operations – aren't always fully reflected in existing coverage.
"I'd say it's less about whether the clients are underinsured, and it's more about how quickly the operations can outgrow existing assumptions," Laidman said.
Climate pressure compounds the same problem. Laidman said the industry is seeing not just more frequent and severe weather events, but more instances where multiple events hit in a single season, or where one loss compounds into another – weather damage followed by delays in repair, for instance, driving up the total cost of a claim.
That's reshaping how insurers think about both pricing and coverage structure, with a sharper focus on location-specific risk, accurate valuations, and the resiliency measures a given farm has in place, from drainage to fire protection to building materials.
Co-operators has built that thinking into a designated initiative, Laidman said, under which the company provides additional funding to help customers rebuild with more resilient materials after a loss – reducing the odds of the same kind of damage recurring.
That same "operation changed, policy didn't" problem resurfaces, in a different form, when a farm changes hands between generations. Laidman called succession one of the most important and often most complex transitions a farm goes through, and one prone to specific insurance blind spots if it isn't managed closely.
"One of the biggest is simply that the operation has changed, but the policy hasn't," Laidman said. New buildings, new equipment, and new revenue streams accumulate over time, and if the policy isn't updated alongside the transition, gaps in coverage or underinsurance can follow.
Ownership and structure changes present another common blind spot. As farms move into partnerships, corporations, or shared ownership between generations, Laidman said it's critical that the named insured, liability structure, and beneficiary details are all realigned with the new reality – otherwise complications can surface at the exact moment a claim is filed. Gaps can also open around roles and responsibilities, particularly when multiple family members are involved in decision-making or when side ventures aren't clearly reflected in the policy.
For Laidman, that makes succession planning as much an insurance moment as a legal or financial one. Insurers, he said, need to work with families alongside their legal advisors through the transition, reviewing coverage to reflect not just who owns the farm, but how it operates today and how it's likely to operate going forward.
"It's about establishing and maintaining a partnership. That makes it easier to keep an ongoing dialogue between client and insurer and that’s the most effective way to ensure that the operation stays protected and that the transition is clear," Laidman said.
