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Agriculture is more than just "farming." Farms and ranches are being integrated into processing operations that combine manufacturing and transit with crop and livestock raising. Recognizing this evolution in the agricultural economy, AAIS developed the industry's first standard program for insuring property exposures of an integrated agribusiness enterprise.
The AAIS Agricultural Output Program (AgOP) provides forms, manual classifications and rules, and a flexible rating procedure for insuring property exposures for more than 80 classes of
"agribusiness" risks.
Modeled in part after the AAIS Commercial Output Program (COP), the AgOP provides broad commercial property and inland marine coverage in a single policy form. Coverage for builders risk, computers, and mobile equipment is provided in the same form as coverage for buildings and personal property, including stock.
In addition, four time element options are available in the base form, and a separate crime coverage part provides a broad range of options that incorporate features of highly competitive commercial crime programs.
The AgOP provides a streamlined alternative to commercial property forms for agribusiness risks that don’t fall neatly into standard commercial classifications. Its flexible rating procedure is ideally suited to the unique nature of agricultural operations.
At the same time, the AgOP gives insurers several ways to control their exposure. Most importantly:
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Carriers can determine individual sublimits for additional, extended, supplemental, and crime coverages simply by entering them in the declarations. By putting "0" for an entry, a carrier can, in effect, exclude the coverage.
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Carriers can choose between blanket or scheduled coverage, or can combine the two by granting blanket coverage with exceptions for certain scheduled locations, structures, equipment, stock, or other personal property.
Aside from the broad coverage, several other advantages are found in the AAIS Agricultural
Output Program.
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The combination of commercial property and inland marine coverages in a single form reduces the potential for coverage gaps that exists when property forms are packaged with inland marine floaters.
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The AgOP can greatly simplify the process of structuring property coverage for an agribusiness account. Typically, a broker submits a long list of coverages needed for an account, and the insurer pulls together a series of forms and endorsements--perhaps none of which have been designed for application to agricultural risks. The
AgOP has been created specifically for agribusiness risks.
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Coverage for computers, mobile equipment, and other inland marine exposures applies to the fullest extent that is usually provided when written under stand-alone inland marine floaters and includes coverage for loss caused
by flood and earthquake. Earthquake and flood coverage for loss to building property, other personal property, and stock can be provided by endorsement.
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The flexible, judgment-oriented deficiency point rating system is well suited for rating the unique combinations of exposures presented by agribusiness.
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