AAIS AGRIBUSINESS DECLARATIONS

(February 2025)

INTRODUCTION

The American Association of Insurance Services (AAIS) Agricultural Output Program does not have a specific declarations page. Instead, it provides two suggested advisory declarations, both of which are extensive and complex. The limits for all coverages must be listed on the declarations, along with certain exclusions and limitations. This results in a comprehensive, yet potentially confusing declarations.

This analysis examines the longer and more comprehensive of the two advisory declarations.

Note: It’s important to keep in mind that each insurance company typically designs and develops its own declarations.

AGRIBUSINESS COMMON POLICY DECLARATIONS

Several agribusiness coverages can be combined as a package, so an Agribusiness Common Policy Declarations exists. It provides the following common information and is used regardless of the number of coverages provided on the policy.

The following general information is provided:

· Insurance company that provides coverage

· Policy number

· Renewal certificate number (if there is no expiration date)

· Producer name and number

· Named insured and mailing address

· Policy period

· Policy time effective and expiration, whichever below is checked:

o 12:01 a.m. Standard Time; or

o 12:00 Noon at the named insured’s mailing address

· Description of covered business

· Premium for coverage parts include

o Property Coverage

o General Liability Coverage

o Inland Marine Coverage

o Other Coverage

· List of forms, endorsements, and schedules that apply

· Insurance company and agent’s signatures and date

AGRIBUSINESS PROPERTY COVERAGES DECLARATIONS

General Policy Provisions

This section includes the policy number, effective date, and named insured. This should be the same as the corresponding entries on the common policy declarations.

A loss payee may be listed in the space provided or on the schedule for mortgages and other interests. This section also has a space to reflect a return premium payee.

The following blanket limits for all locations must be entered in the spaces provided (unless coverage is written on a scheduled basis):

· Buildings and Personal Property

· Stock

· Computers

· Mobile Equipment

Valuation can be on a replacement cost or actual cash value basis. Stock valuation can be on a selling price basis.

The coinsurance percentage that applies to each coverage must be entered in the space(s) provided.

The inflation protection percentage is entered in the space provided when applicable.

The deductible or deductibles that apply must be entered in the space(s) provided. The options are:

· All Perils

· Windstorm or Hail

· Other

Any exceptions to the above are listed on the schedule of covered property and provisions.

There must be an entry for any attachments that apply. They are:

· Schedule of Forms and Endorsements

· Schedule of Limits and Conditions

· Income Coverage Supplement

· Crime Coverage Supplement

· Schedule of Additional Interests

· Schedule of Locations

· Schedule of Covered Property and Provisions

Schedule of Forms and Endorsements

This schedule lists every form number and title attached at the time the policy is issued.

Schedule of Limits and Conditions

This schedule lists every coverage in AG 0100–Agribusiness Property and Income Coverage Part that requires the entry of limits, deductibles, or other information. There is also a list of coverages that can be endorsed to the policy. Coverage applies only if a limit and/or additional information is entered. As a result, it is important to provide the information for every coverage requested because there are no default limits.

Coverages are listed based on where they appear in AG 0100. Limits are required unless otherwise noted.

Additional Coverages

· Additional Debris Removal Expense

· Emergency Removal Expense

· Fire Department Service Charges

· Glass Repair or Replacement Expense

· Inventory and Appraisals Expense

· Pollutant Clean Up and Removal (both a limit and a deductible amount)

· Recharge of Fire Protection Equipment

Coverage Extensions

· Fraud or Deceit

· Newly Acquired Computers

· Newly Acquired or Constructed Buildings

· Newly Acquired Mobile Equipment

· Personal Effects

· Personal Property at Acquired Locations

· Property Away from a Covered Location

· Stock at Acquired Locations

· Trees, Shrubs, Plants, and Lawns

Supplemental Coverages

· Accounts Receivable

· Brands or Labels Expense

· Carrier Liability

· Fine Arts, Furs, Guns, Jewelry, and Metals

· Loss of Use of Dwelling

· Ordinance or Law–Increased Costs

· Overseas Transit and Location

· Property in Transit

· Property on Exhibition

· Property Sold Under an Installment Sales Plan

· Sales Representatives Samples

· Sewer Backup and Water Below the Surface

· Spoilage. Entries are required for the perils that apply. The options are:

o Breakdown

o Contamination

o Power Disruption

· Surface Water Runoff

· Tank Leakage

· Utility Service Interruption. Entries can be made to exclude coverage for any of the following:

o Power

o Overhead Power Lines

o Gas

o Telecommunications

o Overhead Telecommunication Lines

o Water

· Valuable Papers and Records (Cost of Research)

· Watercraft

· Wrongful Delivery of Liquid Property

Other Coverages

· Electrical Breakdown

Equipment must be described and include its size. An entry is not necessary when the limit is $1,000 or less.

· Ordinance or Law–Undamaged Parts of a Building

A limit for this coverage is not required, but an entry that states it applies is required. This section also has an area to enter locations, but the coverage itself does not mention the location entries.

Note: At this point, Income Coverage is listed; however, it will be necessary to see the Income Coverage Supplement for details.

Endorsement Coverage

The coverage provided by the following endorsements is activated by making the appropriate entries for each in the spaces provided:

· AG 0124–Computer Virus and Hacking Coverage

· AG 0128–Crime Coverages (Discovery Basis). All entries are made on the Crime Supplement.

· AG 0132–Functional Replacement Cost

· AG 0136–Hay, Straw, and Fodder Coverage

· AG 0140–Livestock Coverage

· AG 0144–Mortgaged and Stolen Grain Coverage

· AG 0148–Optional Exclusions

· AG 0152–Poultry Coverage

· AG 0156–Pro Rata Limit

· AG 0164–Protective Devices and Services

· AG 0168–Rebuilding Coverage–Excess Insurance Amendment

· AG 0172–Scheduled Earthquake Coverage

· AG 0176–Scheduled Flood Coverage

· AG 0180–Theft Coverage–Amended Limit

· AG 0184–Waiver of Deductible–Commodities

· AG 0188–Warehouse Operators–Legal Liability Coverage

· AG 0192–Windstorm or Hail Deductible

Income Coverage Supplement

Coverage Options:

One of the four following options must be selected, and its limit entered in the space provided:

· Earnings, Rents, and Extra Expense

· Earnings and Extra Expense

· Rents and Extra Expense

· Extra Expense Only

The following applies to the coverage option selected. Appropriate entries must be entered in the spaces provided.

· Deductible

· Coinsurance Percentage

· Value Reporting Coinsurance Percentage

· Monthly Limitation Percentage(s)

· Maximum Period of Indemnity (Number of Days)

Restrictions, Modifications, and Limitations:

Entries are required for any of the following that apply:

· Revised definition of the period of restoration

Modified to increase the amount of time due to enforcing laws, ordinances, or decrees

· Revised waiting period for Mobile Equipment Rental Reimbursement

Expressed in a number of hours

· Radio and Television Antennas

Loss of Earnings or Extra Expense coverage applies to damage to the property described in the space provided

· Software

Revises the Extension of Coverage number of consecutive days

Coverage Extensions:

Entries in this section modify one of the Income Coverage Extensions.

· Period of Loss Extension (after business resumes)

The number of consecutive days is entered in the space provided.

· Grain Storage Income

The number of days is entered in the space provided.

· Seasonal Coverage

The number of days is entered in the space provided.

Additional Income Coverages:

Entries in this section trigger additional income coverages.

· Newly Acquired Locations (Earnings and Extra Expense)

The coverage must be selected, and a limit entered in the space provided.

· Newly Acquired Locations (Extra Expense only)

The coverage must be selected, and a limit entered in the space provided.

Supplemental Income Coverages:

A limit must be entered in the space provided for each coverage selected.

· Public Health Shutdown

o A deductible must also be entered.

· Dependent Locations

o A deductible must also be entered.

· Utility Service Interruption. Entries can be made to exclude coverage for any of the following:

o Power

o Overhead Power Lines

o Gas

o Telecommunications

o Overhead Telecommunication Lines

o Water

· Contract Penalty

o A deductible must also be entered.

· Property in Transit, on Exhibition, or in a Sales Representative’s Custody

o A deductible must also be entered.

Expense Deductions:

Selections in this section exclude expenses from the Income Coverage’s continuing expenses. This reduces the limit required to comply with the coinsurance provision. However, it also reduces the limit available to pay losses.

· Ordinary Payroll can be excluded.

· Payroll expenses for specific names, titles, or job classifications can be excluded.

· Ordinary Payroll expenses can be limited to the number of days entered in the space provided.

· Power, Heat, and Refrigeration expenses can be excluded.

Crime Coverage Supplement

A limit and deductible for any of the following coverages desired must be entered in the spaces provided:

· Employee Fraud and Dishonesty

· Computer and Telecommunications Fraud

· Counterfeit Currency (this includes money orders and traveler checks)

· Forged or Altered Charge, Credit, or Debit Card Written Instruments

· Forged or Altered Checks, Drafts, or Promissory Notes

· Money and Securities

o At Covered Locations

o Away from Covered Locations

· Keytrol Fraud

o This is the fraudulent transfer of covered property from a covered location to an external person or place not covered using an electronic device or access card.

· Forged or Altered Charge, Credit, or Debit Card Written Instruments–Personal Accounts Extension

· Forged or Altered Checks, Drafts, or Promissory Notes–Personal Accounts Extension

· Money and Securities–Conveyance by Armored Vehicles

Valuation:

An entry is required in the space provided if Property other than Money and Securities is valued on an actual cash value basis.

Schedule of Locations

This schedule lists each covered location by location number and item number.

Schedule of Covered Property and Provisions

There are separate schedules for:

· Buildings and Personal Property

· Stock

· Computers

· Mobile Equipment

· Specifically Scheduled Property

· Builders Risk

The item number from the schedule of locations, a description of the covered property, the limit, and the specific coverage provisions that apply are listed on the schedule.

Schedule of Additional Interests

A description of the covered property is entered in the space provided. The additional interest is listed. The options are:

· Mortgagee

· Loss Payee

· Lender’s Loss Payee

· Contract of Sale Loss Payee

It is especially important to clearly identify Mortgagees and Lender’s Loss Payees by name and mailing address. The policy states that mortgagees and loss payees will receive notices of cancellation and/or non-renewal, and the name and address on the declarations provided in this section are used to do so.