Insurance Coverage Is Risky Business For Providers

Ever since Florida got slammed by a series of hurricanes in 2004 and 2005, insurance has been expensive and hard to come by for growers, and steps the state has taken to provide insurance to homeowners has made it even less desirable for private insurers to do business in Florida.

The state-sponsored market of last resort, Citizens Insurance Company, has become the only option for many homeowners and businesses, especially if they are near the coast. To subsidize Citizens, the state is charging private insurance companies a 2 percent surcharge on each premium in the state of Florida. On top of this, the state has enacted a rate freeze for private insurance companies in Florida.

Where the real squeeze comes is when insurance companies can’t pass along rate increases from their reinsurance companies, who are not frozen by the state. Insurance companies buy insurance to minimize their risk and exposure. On a global level, there are layers upon layers of reinsurance to insurance providers, which dictates their capacity or ability to offer insurance.

“Essentially, reinsurers are our suppliers of insurance capacity,” says Peter Fornof, senior vice president at Hortica, which provides insurance coverage to our industry. “When they are uncomfortable with the risk, they either raise rates, reduce capacity or both. They did both after the 2004-2005 hurricane seasons.”

Hortica will pay the first $400,000 of each claim and the reinsurer will pay the rest up to the limit of liability purchased. In a claim that costs $1 million, Hortica pays $400,000 and the reinsurer pays $600,000. “In a catastrophe such as a hurricane, after Hortica pays $2 million out on multiple claims, our catastrophe reinsurance kicks in and pays up to the limit we purchase,” Fornof says.

While growers’ insurance needs are the same related to coverage on structures, crop and income, insurance companies in general have limited the amount of coverage in dollars they will write and won’t insure certain greenhouse structures due to susceptibility to catastrophic wind damage.

“Hortica is in certain cases writing lower limits of liability on wind susceptible structures and not insuring structures that wouldn’t survive a Category 2 hurricane,” he says. “Extremely susceptible property (crop, poly cover) are not being written. On the positive side, Hortica also acts as an agent and writes federal nursery crop insurance on qualified crops for customers. We look at each customer and risk on a case-by-case basis and provide coverage and limits based on our Florida underwriting guidelines.”

In addition to working with an insurance agent who understands the greenhouse industry and their specific business, Fornof recommends growers:
–Work with a structural engineer to strengthen their greenhouses and buildings.
–Choose deductibles that produce affordable premiums but won’t financially impair the business should a loss occur.
–Take other loss control measures, such as installing a generator.

Ben Bolusky, executive director of Florida Nursery Growers & Landscape Association, says he has discussed this problem with the insurance industry and has been exploring possibilities with USDA. He adds that if growers are willing to invest in stronger greenhouses and production facilities that can withstand higher winds, that’s less exposure for crops and a savings on the crop insurance side.

“There are a lot of first rate, cutting edge Florida growers who are making the investment because they want to protect their livelihood,” he says. “Should Florida get hit again, they’ll be the ones left standing.”

Leave a Reply

2 comments on “Insurance Coverage Is Risky Business For Providers

  1. Another option to consider is crop insurance through a supplemental provider like Live Asset Insurance. Check out our site – you’d be surprised at what isn’t traditionally covered and how our services address that.

  2. Another option to consider is crop insurance through a supplemental provider like Live Asset Insurance. Check out our site – you’d be surprised at what isn’t traditionally covered and how our services address that.

More From Finance/Operations...

March 2, 2015

Student Flash Mob At TPIE Has Roots In Floriculture

The local FFA students who entertained TPIE attendees in 2014 and 2015 received industry donations of plants and a greenhouse structure to help expand their horticultural program.

Read More
Rose Rosette on Knockout rose, May 2013. Photo credit: Alan Windham, University of Tennessee

March 2, 2015

Rose Rosette Disease Fight Gets A Boost From Government-Backed Funding

In 2014, $4.6 million was awarded through the Farm Bill to tackle rose rosette disease, a devastating pathogen that affects one of the industry’s most important crops.

Read More
Fig 1 Leafy Gall On Leucanthemum Becky

March 2, 2015

How To Prevent Leafy Gall Before You Lose Plants

Leafy gall is a nasty disease that can go undetected until plant damage is done. Take these steps to protect your crops from infection.

Read More
Latest Stories
IPPS Sharing Plant Production Knowledge Globally Logo

February 25, 2015

International Plant Propagators Western Region Sets Ann…

The annual meet for the International Plant Propagators' Society (IPPS) Western Region has been set for this September. It will take place September 23 to 26 in Modesto, Calif., and will include learning sessions, tours to local nurseries, a research poster display and poster presentations, various networking opportunities and an awards banquet to close the event.

Read More
myers industries Lawn and Garden Logo

February 24, 2015

Myers Industries, Inc. Lawn And Garden Business Sold, N…

The management of Myers Lawn and Garden Group, along with Wingate Partners V, L.P. have recently acquired the Myers Industries, Inc. Lawn and Garden business. The new company is named The HC Companies, and will continue as a North American leading provider of horticulture containers supplying the greenhouse, nursery and retail markets.

Read More
american-hort-logo

February 17, 2015

AmericanHort Announces New Board Members

AmericanHort recently announced the election of new officers and members to the board of directors. Each will assume their positions on the board during Cultivate’15, July 11 to 14 in Columbus, Ohio.

Read More
All American Selections

February 17, 2015

All-America Selections Elects New Officers, Names New J…

While meeting during the Flower and Vegetable Seed Conference in Tampa, Fla., hosted by the American Seed Trade Association, All-America Selections elected new officers for a two-year term. Read on to learn about the new officers, as well as all of the new judges that were added in 2014.

Read More
Greenhouse Grower.com on your desktop, on your phone, on your tablet

February 11, 2015

GreenhouseGrower.com Relaunches With Responsive Design …

Greenhouse Grower magazine, the nation’s leader in profits, production and education for greenhouse growers, announces the launch of its completely redesigned website, GreenhouseGrower.com. The new design is the product of direct user feedback and GreenhouseGrower.com analytics, and includes responsive design for ease of mobile use.

Read More
Andy Higgins

February 3, 2015

MasterTag Names Andy Higgins As Its New President

Former CEO and president of Ecke Ranch, Andy Higgins, joins MasterTag as its new president. He brings more than two decades of industry experience to the position.

Read More
Syngenta Bioline Hires Ronald Valentin For Technical Lead Role

January 28, 2015

Syngenta Bioline Hires Ronald Valentin For Technical Le…

Ronald Valentin has been appointed technical lead for Syngenta Bioline, effective January 2015. He will be responsible for technical support of Bioline biological control agents and will be instrumental in helping growers develop integrated pest management (IPM) solutions.

Read More

January 27, 2015

Give Equal Time To The Number Crunchers

Before investing in a new business opportunity, check in with the financial gurus of your organization to make certain you have the cash flow to back up your efforts.

Read More
Plant Introductions, Inc. partners Mark Griffith, Dr. Michael Dirr and Jeff Beasley and Bailey Nurseries President Terri McEnaney.

January 20, 2015

Bailey Nurseries’ Purchase Of Plant Introductions Inc. …

When Bailey Nurseries purchased its long-time breeding partner, Plant Introductions, Inc. (PII), in early January 2015, it freed the PII team to concentrate on what they do best: develop new plants. Bailey Nurseries will take on the business management side of the partnership, but otherwise the relationship it has enjoyed with PII for years will be largely unchanged.

Read More
Plant Introductions, Inc. partners Mark Griffith, Dr. Michael Dirr and Jeff Beasley and Bailey Nurseries President Terri McEnaney.

January 13, 2015

Bailey Nurseries Acquires Plant Introductions

Bailey Nurseries has acquired Plant Introductions, Inc. (PII), effective January 1, 2015. PII has developed numerous innovative new varieties that have been marketed worldwide, many introduced by Bailey Nurseries.

Read More

January 7, 2015

How Inflation Affects Your Business And Why You Can’t I…

Awareness of the true increase in costs after inflation is a necessary part of good financial management for greenhouse operations.

Read More

December 4, 2014

New Developments In Shipping/Logistics Software

Improved shipping and logistics software from Picas Software and MapMechanics makes it easier for growers to plan loads efficiently and automate day-to-day distribution planning.

Read More
Fritz Dramm

December 2, 2014

Dramm Corporation Welcomes Back Fritz Dramm

Dramm Corp. recently welcomed Fritz Dramm as the new fertilizer production and compliance manager. Dramm previously worked at the company through high school and college, and is back after 20-plus years.

Read More
Sarah Harwood

November 24, 2014

Take Control Of Your Operation’s Succession Planning Pr…

Proper business and estate planning with your intentions clearly expressed can ensure your goals for the future of your business are fulfilled.

Read More

November 24, 2014

Succession Planning For Growers

Succession planning is a sensitive subject, but one that needs to be addressed when deciding on your operation's legacy. Greenhouse Grower caught up with two growers who shared their process and provided tips for a smooth transition.

Read More

November 24, 2014

BrightFarms Pioneers Hydroponic Greenhouses For Urban A…

BrightFarms brings fresh, local produce to underserved areas with hydroponic greenhouses located on neglected urban spaces.

Read More

November 10, 2014

NGB, AFE To Join In #GivingTuesday On December 2

The American Floral Endowment will participate in #GivingTuesday on December 2, a national movement to encourage charitable giving.

Read More

November 8, 2014

Amid Drought, Californians Talk Water

As extreme drought conditions continue, the state looks at how it manages its resources, while growers try to conserve and meet changing consumer needs.

Read More