Diversified Rural Business Needs Proper Insurance Cover – Aviva

Aviva, a leading British insurance company, recently announced that diversification of rural business generated additional income of £400 million in 2008.
Mainly, those were farmers or landlords with large pieces of land, who took advantage of outbuildings: 51% of such farmers diversified their businesses last year by renting out buildings. Interestingly, 36% of farmers who decided to diversify chose to rent out outbuildings for non-farming purposes; this type of diversification brought 68% of income.
Good as it sounds, diversification of rural business carries a number of potential risks, says Mr. Graeme Gibson, Aviva’s senior agricultural underwriter. For instance, housing a farm-shop in an outbuilding might seem a great idea unless the building is in poor condition and poses threat to personal safety. Mr. Gibson added that the insurance company has already noticed a tendency among farmers to convert outbuildings into leisure facilities, such as coffee shops, play areas, and golf sites. He added, however, that the potential risks of such diversification are many; therefore, farmers need to have either adequate specialisation or insurance cover (preferably, both).
Aviva Insurance offers farmers various types of insurance cover against several types of risks, such as: damage to rented property, interruption of business, accidental damage, frozen foods, and liabilities.
The first, property damage, protects farmers’ buildings and contents from specified perils, such as fire, flood, etc. Business interruption covers loss of income from diversified activities caused by specified perils (extensions to the basic cover are available). Accidental damage cover protects businessmen from accidental damage to contents, etc.
Typically, any Aviva agricultural insurance cover can be used for diversification business purposes; however, Mr. Gibson recommends all farmers looking to diversify their activities to consult a broker who will help identify potential risks.