AG 0152–POULTRY COVERAGE
(February 2025)
The American Association of Insurance Services (AAIS) AG 0152–Poultry Coverage endorsement is used with the AAIS Agricultural Output Program to provide coverage for poultry. It is attached to AG 0100–Agribusiness Property and Income Coverage Part.
This endorsement is not complete without the AG 0100. Instead, the AG 0152 amends the following parts of the AG 0100 to provide coverage and, even then, the amendments apply only to the coverage being provided by the endorsement:
· Property Covered
· Property Not Covered
· Supplemental Poultry Coverages
· Perils Covered
· Perils Excluded
· Valuation
The insurance company provides the coverage described in this endorsement during the policy period in exchange for the named insured's premium payment. This endorsement is subject to CL 100–Common Policy Conditions and the following sections in AG 0100–Agribusiness Property and Income Coverage Part:
· Agreement
· Definitions
· What Must Be Done In Case Of Loss
· How Much We Pay
· Loss Payment
· Other Conditions
The following definitions apply in addition to the definitions in the AG 0100. These new definitions apply only to the coverages this endorsement provides:
A single fowl of the type and kind listed and described on the declarations. When reference is to more than one bird, the term ‘birds’ is used.
Birds in
shared housing born on the same hatch date.
Any group of birds with a common hatch date.
A specific
24 consecutive hour period during which birds are hatched.
The date on which the named insured became the birds’ owner.
These are feed, grain, grit, medicine, vaccines, sanitation products, litter, and fuel.
Note: Grit is a minute, rough
granule of stone. Litter is any material used as bedding for animals. Straw is
an example of such bedding.
Only the poultry listed and described on the declarations at a covered location are covered. Supplies that are incidental to and used directly to raise or service covered poultry are also covered but only when there is a limit for supplies on the declarations.
Coverage does not apply to the following property:
These are goods illegal to possess or legal but in the course of illegal transportation.
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Example: Oscar was fascinated with a bird he encountered in Uruguay. He wanted to attempt cross breeding to increase the size of his other birds. Due to various laws and import restrictions, Oscar was not permitted to bring the bird into the country. However, Oscar found a black-market supplier. This bird is not covered because it is contraband. |
Sick or diseased poultry are not covered. The only exception is when a covered peril causes the poultry to become sick or diseased and the poultry subsequently dies. This exception is described in greater detail under the Other Condition later in this analysis.
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Example: Jennifer’s poultry are tested
and found positive for bird flu. She is ordered to immediately destroy her
entire flock and decontaminate the property. When she contacts her insurance company,
she is saddened to learn she has no coverage because bird flu is not a
covered peril. |
Coverage only applies to property described on the declarations. Therefore, if it is not described, it is not covered.
Coverage applies to each of the following only when a limit is listed on the declarations.
When a limit is entered on the declarations for eggs, the coverage provided is for eggs that have been packed, crated, and are pending shipment to market.
Instead of only covering the eggs, a limit can be entered for eggs and egg packing material. The coverage provided is then expanded to cover the packing material in addition to the eggs that have been packed, crated, and are pending shipment.
Note: A limit should be
entered for Eggs or Eggs and Packing Material but not for both.
If there is a limit on the declarations for this Supplemental Coverage, covered poultry in transit to market that is damaged when the transporting vehicle has a collision, upset or overturn is covered. The coverage is for the reduction in value between the actual cash value of the poultry before and after the loss.
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Example: Mike’s semi flips on its side
when making a wide turn. Most of the birds that were being taken to slaughter
are killed immediately, but even the survivors are required to be destroyed
immediately. Mike would have collected .50 cents per pound for the birds but,
because of the accident, the birds can be sold only for animal feed, so that
value is .05 cents per pound. Mike is therefore paid .45 cents per pound for
the loss subject to the limit of insurance. |
If there is a limit on the declarations for this Supplemental Coverage, poultry is covered if the building or structure where they are housed is damaged by a covered peril. The coverage is for the reduction in value between the actual cash value of the poultry before and after the loss.
The insured cannot collect the money and do nothing. He or she must make reasonable efforts to provide adequate housing for the poultry and, if necessary, minimize the loss by selling the poultry at the highest possible price.
There is no coverage for the damage to the building or structure.
Note: A statement in this coverage refers to a percentage
entered on the declarations for this coverage, but the declarations does not
have a space for a percentage to be entered.
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Example: A fifty-pound drone falls
through Patricia’s poultry barn roof. The temperatures plummet, and she must
move the poultry or sell them at a loss. A neighbor had recently sold a hatch
and was preparing for a new one, so she was willing to accept 1/3 of her
flock. The barn cannot be repaired as quickly as needed to save the birds, so
the remaining birds must be sold. Patricia can sell the birds for .35 cents a
pound, but the actual cash value is .50 cents. The loss is, therefore,
settled at .15 cents per pound. |
If there is a limit on the declarations for this Supplemental Coverage and if a loss occurs because electrical power supplied from an off premises power source to the poultry housing building(s) is interrupted, there is coverage. Direct physical damage to the off-premises power source caused by a peril covered by this endorsement must be the reason for the interruption.
A specific deductible may be indicated in the declarations. If a deductible is listed for this coverage, it will apply.
Note:
The coverage form does not specify the outcome if no deductible is
listed in the declarations for this coverage.
The perils covered differences in the AG 0100 and the AG 0152 are significant. The AG 0100 covered perils are risks of direct physical loss or damage, subject to certain exclusions and limitations. AG 0152–Poultry Coverage applies to only losses caused by the perils listed below. This reduced coverage is an important difference that may be overlooked if not brought to the customer's attention when the policy is delivered.
The insured can choose basic, optional or broad perils. Whatever is selected must be shown on the declarations.
Coverage applies only to direct physical loss of property caused by the listed Basic Perils, subject to excluded perils.
Loss or damage caused by or resulting from sonic boom is excluded.
This coverage does not insure loss to poultry due to any of the following, even if a result of windstorm or hail:
· Frost
· Cold weather
· Rain, snow, sand, or dust that damages covered property inside a building, whether wind-driven or not. There is an exception. Coverage applies if wind or hail first damages the building’s roof or walls and creates an opening for these elements to enter the building.
Direct physical contact between the poultry and aircraft, spacecraft, missiles or vehicles is covered. This also applies if the contact is with the building holding the covered property. The term vehicle includes the animals pulling the vehicle. If objects fall from an aircraft or are thrown up by an aircraft or vehicle and make direct physical contact with the covered property or the building holding the covered property, there is also coverage.
Coverage applies to only sudden and accidental loss or damage by smoke. There is no coverage for loss or damage caused by agricultural smudging or industrial operations.
In addition to riot and civil common, the insurance company pays for loss or damage due to the following:
·
Acts of employees who are on strike but only while
they occupy a covered location
·
Pilferage and looting that takes place at the
same time and place of civil commotion or rioting
Collision is expanded to include not only collision but also upset and overturn of any land vehicle transporting the covered property. However, there is an exception: this coverage does not apply if the Supplemental Poultry Coverage is selected for eggs or eggs and packing materials.
This is the same as the definition in AG 0100.
This is the same as the definition in AG 0100.
The insured can select basic perils plus one or more of the following optional perils. The perils selected must be shown on the declarations.
Note:
If all optional perils are desired, just broad perils should be selected on the
declarations.
This peril is restricted
to willful or malicious damage to covered property. It can include destruction
but is not limited to destruction. There are two exceptions. Theft of property
is not covered, and loss or damage due
to a change in temperature or humidity is also not covered.
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Example: Omar is being honored at the
statewide egg producers' convention, so his entire family travels to the
presentation and stays overnight. When they return home, they discover that
vandals have used their ATVs to wreak havoc on the family's poultry operation.
The vandals also damaged power lines, causing all the property in the freezer
units to thaw. While the damage to the poultry is covered, the spoilage of
the flash-frozen products kept in the freezer units is not.. |
Earthquake is not defined. However, volcanic eruption includes eruption, explosion, and effusion of a volcano. All earthquakes or volcanic eruptions within 168 consecutive hours are considered a single loss. This period is not affected by the expiration date. This means that if the earthquake strikes the day before the policy expires, coverage continues for all aftershocks that may occur in the next six days even though the policy has expired.
Flood is water that overflows or inundates areas that are usually dry. It can be caused naturally, artificially or accidentally by any of the following:
· Waves, tides and overflow of a body of water. The waves may be tidal waves, tsunamis or any other type of waves. This includes:
o Spray from any of the above
o Wind driven conditions that impact any of the above
o Surges
and storm tides
· Any surface water accumulation or runoff that is both unusual and rapid. This applies regardless of the source.
Certain paragraphs within the Item 1.g. Water in the Perils Not Covered Section of the AG 0100 do not apply when this coverage is selected. The listed items under Perils Excluded are: 1.g.1)a), 1.g.1)d), and 1.g.2).
If the weight of ice, sleet or snow causes a collapse, there is coverage.
When Broad Perils is selected on the declarations, direct physical loss to covered property caused by any of the Basic Perils and Optional Perils is covered unless specifically excluded in the Perils Excluded section.
This first group of exclusions applies whether or not the loss event results in widespread damage or affects a significant geographical area and are essentially absolute. Subject to specific exceptions, each is completely excluded, regardless of any other cause or event contributing to a loss, either concurrently or in any other sequence. The insurance company does not pay for any direct or indirect loss or damage caused by or resulting from any of these events.
Coverage does not extend to any increased costs resulting from the enforcement of building codes, ordinances, or laws. These regulations must pertain to the construction, use, repair or requiring of the demolition or debris removal of any building or structure.
Loss or damage caused by order of any civil authority is excluded. Some examples of such loss or damage are seizure, confiscation, destruction, or property quarantine. However, there is an exception: if a civil authority orders property to be destroyed to prevent a fire from spreading, coverage applies but only if a covered peril causes the fire.
Coverage
does not apply to any loss caused by or resulting from nuclear reactions,
nuclear radiation, or radioactive contamination. This applies regardless of whether
the event is controlled, uncontrolled, natural, accidental, or caused by
artificial means. Losses resulting from nuclear hazards are not considered
losses caused by fire, explosion, or smoke. However, there is an exception for
direct losses caused by fire that result from a nuclear hazard.
Note: Coverage for nuclear
risks is available through only nuclear umbrella coverage associations.
Damage to covered property caused by earthquake, landslide, mudslide, mudflow, mine subsidence, sinking-rising-shifting earth, and earth movement caused by volcanic eruption-explosion or effusion is excluded.
If property is damaged by fire, explosion or volcanic action resulting from earth movement, eruption, explosion, or the effusion of a volcano, there is coverage for the specific fire, explosion or volcanic action damage. Volcanic eruptions that occur within a 168-hour time period are considered a single occurrence.
If a volcanic action begins at the end of the policy period, the coverage continues into the next policy period since the 168-hour time period is not limited by the policy expiration.
If Optional Peril, Earthquake or Volcanic Eruption is selected on the declarations as covered, there is coverage as described in the optional peril, but the following is still not covered:
· Any earthquake or volcanic eruption that begins prior to the inception date of the policy.
· Blasting, except the blasting from a volcanic explosion, landslide, mine subsidence, mudflow or mudslide even if triggered or caused by an earthquake or volcanic eruption.
· Flooding, tidal wave, tsunami that occurs because of an earthquake or volcanic eruption.
Note: If the earthquake or
volcanic eruptions start within 72 hours of the inception date of the policy and the prior policy has no earthquake
coverage, the Optional Peril, Earthquake or Volcanic Eruption still applies.
IMPORTANT
NOTE: The war exclusion in this form is deleted and replaced by a
mandatory exclusion AG 0135–Exclusion – War and Military Action. Because the
exclusion is mandatory, the AG 0135 is analyzed in place of the exclusion in
the form.
Loss or damage that is caused either directly or indirectly by the following activities are not covered:
The exclusion outlined in this endorsement is absolute and supersedes the Nuclear Hazard exclusion regarding any action that falls within the terms of the endorsement and involves a nuclear reaction, radiation, or radioactive contamination associated with the Nuclear Hazard exclusion.
Note:
This last paragraph is very
important because the Nuclear Hazard exclusion provides a limited amount of
coverage for fire due to specific nuclear events; however, fire is totally
eliminated under this exclusion.
A loss that is caused by the failure of a utility to supply its service to the insured is not covered if the failure occurs off the insured’s premises.
There are two exceptions.
· If the utility failure causes damage due to a covered peril, there is coverage for that resulting damage.
·
If Supplemental Coverage Off-Premises Power
Interruption coverage is selected on the declarations, the utility failure
exclusion does not apply.
Note: The Water exclusion in this form is deleted and replaced by mandatory exclusion AG 0149–Water Damage Amendments. Because the endorsement is mandatory, it is analyzed in place of the exclusion in the form.
Loss that is caused by any of the following is not covered:
o Spray from any of the above
o Wind driven conditions that impact any of the above
o Surges and storm tides
o Drains
o Sewer
o Sump and all related equipment include the pump
o Any system designed to drain off foundation water
o Basements
o Openings such as windows or doors
o Foundations
o Floors or walls
o Paved surfaces
o Structures such as septic tanks or swimming pools.
When any of the above results in a fire, explosion or sprinkler leakage loss, coverage is provided.
This exclusion is absolute and applies regardless of the reason for the water or if the material in the water is manmade or an act of nature. It applies even if the water or material travel over, through, or are released from or escape from a water containment system such as a dam or levee.
This second group of exclusions applies to loss or damage caused by or resulting from any of the following loss events. Some of these exclusions have exceptions, conditions, or limitations that should be noted and reviewed carefully. The insurance company does not pay for any loss or damage caused by or resulting from any of these events.
Loss caused by electrical arcing or electrical currents is not covered under this policy. Such arcing or currents may lead to a fire. In that case, coverage does apply to the damage caused by the fire. Additionally, losses caused by lightning are covered.
In addition, coverage extends to direct losses at a covered location that result from a covered peril when power or any other utility service is interrupted.
Loss or damage resulting from mechanical breakdown is not covered. Additionally, any loss or damage that occurs when centrifugal force causes moving parts of machinery to burst or rupture is also excluded. However, if any of these events lead to a covered peril, the resulting loss or damage caused by that peril will be covered.
There is no coverage for loss caused by loss of use, delay, business interruption, or loss of market. The only exception is Supplemental Poultry Coverages 3. Housing Damage–Consequential Loss if selected on the declarations.
There is no coverage for loss or damage resulting from one or more of the following:
· Acts, errors, or omissions that relate to land use, design, specification, construction, installation, or maintenance of property
· Acts, errors, or omissions that relate to planning, zoning, developing, siting, surveying, grading, compacting, or maintaining property, whether at a covered location or not
· Defective, weak, inadequate, faulty, or unsound construction materials that were used in construction or repair, whether at a covered location or not
· Costs of making good on a design error
· Data processing or programming errors or giving improper instructions
If any of the items listed above cause a covered peril, coverage applies to the loss or damage caused by the covered peril.
There is no coverage if weather conditions contribute in any way to cause loss or damage due to a peril excluded under 1. Primary Exclusions. However, coverage applies to losses caused by covered perils, unless an ensuing loss is specifically excluded.
This provision applies in addition to the provisions in What Must Be Done In Case Of Loss in AG 0100. It applies only to the coverage this endorsement provides.
The named insured must notify the insurance company within 24 hours of the occurrence of the covered peril that causes the loss. Please note that it is not within 24 hours of the loss – it is within 24 hours of the covered peril. The loss may take many days to totally manifest, so the time starts with the peril.
If more than 100 birds die, all must be held for at least 72 hours so that the insurance company can inspect. This requirement does not apply if doing so would violate laws, ordinances or governmental health regulation.
If the insurance company is not able to do the inspection within the 72-hour time period, the named insured is required to have the birds counted in front of two impartial parties. Those witnesses must sign the named insured’s statement of the count. The count must be sent to the insurance company promptly.
Property this endorsement covers is valued as follows:
Poultry valuation is based on the least of the following:
· The actual cash value of the poultry at time of the loss
· Maximum value shown in the declarations
· The current market value
If reporting conditions apply, the formula for establishing the actual cash value may be stated in the declarations.
Supplies covered by this endorsement are valued at actual cash value at the time of loss.
3. Property of Others
The valuations in 1. and 2. above apply to property owned by others but for which the named insured is legally liable subject to one additional stipulation. The insurance will pay no more than the amount for which the named insured is legally liable.
These provisions replace AG 0100 Loss Settlement Terms, Coinsurance, Property Covered Other than Builders' Risk and Value Reporting:
a. Subject to all terms in AG 0100 How Much We Pay, the insurance company pays the least of the following:
· The amount determined under Valuation
· The cost to repair, replace, or rebuild covered property with property of similar kind and quality
· The limit that applies to covered property
b. The limit of poultry is the actual cash of the birds based on the valuation sections. However, there may be limits on the declarations based on buildings, structures and covered locations. If so, the payment will not exceed any such established limits.
Poultry coinsurance is based on the number of birds, not the amount of insurance. Therefore, the coinsurance is based on birds, not values. If the insured owns more birds per hatch than reported, any loss payment will be reduced. It is computed per hatch.
The penalty is computed as follows:
· Step 1. Determine the number of birds reported in the hatch at inception.
· Step 2. Determine the number of birds actually in the hatch at inception.
· Step 3. Divide Step 1 by Step 2.
· Step 4. Multiply the total amount of loss by Step 3.
· Step 5. Subtract the deductible from Step 4.
o If step 5. is more than the limit of insurance, the limit of insurance is paid.
o If step 5. is less than the limit of insurance, it is paid, and the insured must pay the difference between the loss amount and the payment amount.
This condition applies to any item with value reporting beside it in the declarations. There are three methods of reporting – Monthly Hatch, Monthly Report of Birds and Monthly Report of Poultry Values. These options allow flexibility with the particular agribusiness operations method of keeping track of inventory.
This policy requires monthly reporting, and the report is due within 15 days of the last day of each business month and at policy expiration. This means if a policy is effective 3/1-3/1, the first report is due on 4/15 for the values reported on 3/31. The policy can be amended only if there is a written agreement between both parties and shown on the declarations.
The reports must describe all poultry subject to the report. The description should include kind, type and location of the poultry. The method of reporting varies based on what is indicated on the declarations.
The insured must report all the birds acquired during the month. The birds are covered as of the date of possession. Coverage ends on the date the report is due. As of that date, the new birds are specifically insured based on the terms of the endorsement. If a bird is not reported, it is not covered.
Premium is due within 40 days of the report.
The insured must report all the birds on hand as of the last business day of the month. They must be reported based on age, kind and type for each location. The valuation table on the declarations is used to develop the actual cash value for the birds used for loss adjustment and premium development.
If the report is late when a loss occurs, the loss is adjusted based on the last filed report.
Premium is due within 40 days of the report.
Note: This is the standard
monthly reporting and adjustment method, in which the insured computes and pays
the premium for the prior month of coverage. There is no deposit to be worked
off and no annual adjustment.
The insured must report the full value of the poultry on hand as of the last business day of the month. Each report must include the number of birds and the value in and of each hatch. If a report is late when a loss occurs, the loss paid cannot exceed the values on the last filed report.
Premium is adjusted at the anniversary date of termination and based on the average values reported. The insured can choose a monthly adjustment in the declarations. If so, the earned premium is computed each month.
Note: This is very similar to
a standard property reporting method.
This additional condition applies to the coverage this endorsement provides. It does not replace any other conditions in AG 0100.
Poultry loss means death. The death must result from a covered peril and happen within 48 hours of the occurrence.
Death includes any destruction required because of damage or injury a covered peril causes and an official health officer, attending veterinarian, or the insurance company's authorized representative recommends or directs. The destruction must take place within 48 hours after the occurrence unless the insurance company's representative authorizes a longer time period.