Why Standard Livestock Cover Isn’t Enough: Protecting Your Herd From Inability To Milk Losses
By Michael Dennis, Principal Broker
When it comes to insuring livestock, most policies are designed with one major peril in mind: fire. While each dairy farm’s risk of bushfire will vary, the reality is that fire is the event insurers see as most likely to cause catastrophic herd losses, and it’s the central event most livestock cover responds to.
But here’s the key point: while bushfires affecting dairy farms can lead to death or euthanasia of dairy cows, that is not always how the loss presents. The arguably more common outcome is that cows survive but can no longer be milked due to damage to their teats.
That’s why if you’re going to the effort and expense of insuring your herd for fire, you need to make sure your policy is structured to respond to this very real inability to milk risk.
Why Fire Cover Alone May Not Be Enough
A standard livestock policy will usually respond if your animals are killed in a fire, or if they are so badly injured that a vet determines they need to be put down on humane grounds. That sounds straightforward, but the practical reality for dairy farmers is much more complicated.
Bushfires don’t always kill cows outright. In some cases, animals survive but are left with injuries that change their productive future. One example many in South West Victoria will remember is the St Patrick’s Day fires in 2017. Many of our clients’ dairy cows survived the fire and were seemingly undamaged, until it became apparent that they had burnt and/or smoke damaged teats. The cows couldn’t be milked.
Now imagine trying to run a dairy business in that situation. You’re still feeding and managing the herd, but they can no longer produce milk, the very thing that makes them valuable. Under the wording of some insurance policies, this scenario does not trigger a payout. The animals are alive, and no vet would say they must be euthanised. In other words, you could be left with the full financial impact and no insurance support.
The Difference “Inability to Milk” Cover Makes
This is where a little-known additional benefit steps in: “Inability to Milk” cover. With this in place, your policy doesn’t just recognise whether the animal is alive or dead, it recognises the core value of your dairy herd lies in milk production.
If your cows are injured in a fire and can no longer be milked, the policy responds. The insurer pays out based on the market value of the cow prior to the event, less salvage.
That payout can be the difference between recovering and replacing your herd quickly, or being forced to carry significant financial losses.
Why You Need to Check Your Policy
It’s essential to note that not every policy includes this benefit. Some do, some don’t, and the wording can make a big difference when it comes to claims time. This is why relying on “standard farm pack” cover can be risky. It’s also why working with a broker who knows dairy farming is essential.
At Dairy Protect, we don’t just ask if your herd is covered for fire, we dig into whether your policy would respond to the real-life outcomes of a fire. Because let’s face it: insurance that doesn’t pay out when your herd can’t be milked isn’t really protecting your livelihood.
The Bottom Line
Even if fire risk feels low where you farm, it’s still the core peril most livestock policies are built to cover. If you’re going to take out livestock cover for that risk, it’s vital you make sure the wording includes “Inability to Milk.” Otherwise, you could find yourself paying premiums year after year, only to discover when disaster strikes that the cover doesn’t respond in the way you need it to.
Your herd is only valuable if it can be milked. Protecting that value is what makes “Inability to Milk” cover one of the most essential safeguards for any dairy farmer.
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