Livestock Insurance in the prairies: Protecting your livestock from disease, weather and theft
If you are a livestock producer on the prairies, one of the most important things to understand about your policy is what it doesn’t cover. A standard livestock policy insures your herd against named perils like fire, weather and theft. It does not cover disease. That gap catches more producers off guard than almost anything else, and it’s the first thing I walk clients through.
I’m Carrie Hutchings, Director of Middle Market Sales for Saskatchewan and Manitoba at Westland Insurance. I’ve spent 22 years in insurance, the majority specializing in farm and commercial agriculture. What follows blends the general shape of how livestock coverage works with what I’ve actually seen come through claims and client conversations over the years.
What does livestock insurance actually cover?
Livestock insurance on a farm policy works on a named perils basis. That means your herd is insured against a specific list of causes of loss, not against anything and everything that could go wrong.
The common perils on a livestock schedule typically include fire, lightning, explosion, smoke, impact by vehicle, windstorm and hail, theft, transportation, earthquake, flood, collapse, electrocution, drowning, accidental shooting, attack by wild animal or dog, and entrapment. Each of those has its own limitations, and coverage varies by insurer, so this is a guideline rather than a guarantee of what any one policy includes.
If you run cattle, horses and a small poultry flock on the same operation, you don’t need three separate policies. All named perils livestock coverage can sit on your main farm policy, with each type of livestock carrying its own coverage line and limit. Liability extends from that same main farm policy.
What is the biggest misconception about livestock coverage?
Disease is not covered on a standard livestock policy. Period. This is, in my experience, the single most common misunderstanding prairie producers have. The only way to insure against sickness or disease is through a separate, stand-alone full mortality policy. That’s a different product from your named perils livestock coverage, and it works differently too.
Under a full mortality policy, each individual animal has to be vet checked, with a substantiated value agreed upon with the insurer. So, if a producer assumes their farm policy will respond to a disease outbreak in the herd, it won’t. That has to be purchased separately, and it has to be set up animal by animal.
What does a real weather-related claim look like?
One claim that stands out to me involved cattle falling through the ice on a dugout. The insured called to report the loss, but the exact number of animals couldn’t be confirmed until the following spring, once the ice melted and the cattle could actually be recovered.
The insurer paid out for an agreed number of animals at the time of the loss, then settled the claim in the spring once the final count was known. It’s a good example of how a weather claim on livestock doesn’t always resolve quickly. Sometimes you’re waiting on the season to change before anyone knows the real extent of the loss.
Why doesn’t every weather loss get fully covered?
This is a good example of one of the more challenging conversations I’ve had with a client, as a farm client did not have livestock insured on their policy at all. During a severe spring snow and windstorm, she lost at least 80 head of yearling cattle. The animals had bunched up against a fence in the corner of a pasture near a slough, ended up piled three layers deep, and drowned or were trampled. Only four head survived.
I had to tell her there was no coverage for the loss because livestock coverage had never been added to her farm policy. But here’s the part that matters even if she had carried it: named perils coverage excludes loss from wind-driven snow or rain, and it excludes huddling, piling and suffocation. Even with a policy in place, only the animals that were deemed to have drowned would have been covered.
With today’s cattle prices, that loss could equal $360,000 or more. Even with coverage in place, not every animal in that pile would have qualified for a payout, because of how narrowly named perils coverage is written around the actual cause of death.
The lesson I always take away from this is: named perils will not cover every loss, and it’s up to the client to ask what is and what is not covered and up to the broker to walk through exactly what’s excluded and what options are available before a client finds out the hard way.
Why are producers reaching out about livestock coverage right now?
A few things tend to trigger that first call. High market prices for livestock are a big one right now. A producer might buy a single animal at a high value and want to make sure it’s protected. Others call after a fire or flood loss, which prompts them to check what they actually have. Some have already had an uninsured loss, lost one or two animals with no coverage in place, and want to fix that going forward. New producers just entering the industry often call simply to protect their interests. And a fair number, honestly, come from what I’d call coffee talk, where producers compare notes on insurance with each other.
Who’s most exposed to a livestock loss right now?
Every livestock producer carries some exposure to loss, but the specific risk right now is under-insurance relative to current market value.
Cattle prices have moved a lot in a short window. Yearlings that sold for $1,500 a couple of years ago are now selling for $4,500. If a producer set their insured limits when prices were lower and hasn’t updated them, they’re carrying a real gap between what they’d recover in a claim and what the animal is actually worth today.
If you’re already insuring livestock, this is worth reviewing with your broker. If you’re not insuring any livestock at all, given where prices sit, it’s worth asking about. Minimal Loss Clause options are available which may also be enticing to producers who may want coverage but at a lesser premium.
How does a theft claim actually work?
Theft is one of the named perils, but it has real boundaries. The theft peril does not cover loss or damage caused by escape, mysterious disappearance, or a loss or shortage discovered when taking inventory. In other words, if you count your herd and come up short with no explanation, that’s not a theft claim.
To have a legitimate theft claim, it has to be reported to police, and there needs to be a sign of theft. That could be cut wire, gates left open, vehicle tracks, or some other evidence of tampering.
A few practical habits make a real difference here. Some producers lock their pasture gates to deter theft in the first place. I’d also recommend recording the number of animals in each pasture and tagging every animal for identification. Many producers brand their cattle, and that brand gets verified whenever the animal is sold at auction. Cattle thieves have actually been caught this way, selling stolen animals through auction and getting flagged by the brand check.
What should producers do to protect their coverage and their claim?
A few things fall squarely on the producer, not the broker or the insurer.
- Keep your broker updated on your numbers. It’s the insured’s responsibility to keep the broker aware of how many livestock they’re carrying and at what value, since markets fluctuate and you’re responsible for insuring at fair market value.
- Watch your co-insurance position. As producers buy and sell animals, they need to keep their broker informed to make sure they’re insuring at 90% of their total livestock numbers in each class. Co-insurance applies, so falling short of that threshold can affect a claim payout.
- Know your policy’s exclusions before you need to use it. Read the actual policy wording and talk it through with your broker rather than assuming.
What you should look for in a policy?
Coverage can be customized to what your operation actually needs, but that only works if you know what you’re customizing. The exclusions are where most surprises happen, not the inclusions. Sit down with your broker and go through the wording line by line rather than assuming a standard policy will flex to cover whatever comes up.
How does a licensed broker add value?
This is the part I’d underline most. Producers should always consult with a broker rather than buying coverage off a generic form. There are more options available than most people realize, and the risk of going it alone is real. A producer could buy a form policy and only find out at claim time that they didn’t purchase the right coverage for what they actually needed.
Key Takeaways
- Standard livestock coverage is named perils only. It does not cover disease. Disease requires a separate, stand-alone full mortality policy with individual vet-checked valuations.
- Named perils coverage has real limits even within covered categories. Wind-driven snow, rain, huddling, piling and suffocation are commonly excluded, even under a weather-related loss.
- Theft coverage does not extend to escape, mysterious disappearance, or unexplained inventory shortages. A legitimate theft claim needs police involvement and physical evidence of tampering.
- With cattle prices roughly tripling in a few years (from about $1,500 to $4,500 per yearling as of this writing), under-insurance relative to market value is a live risk for producers who haven’t updated their limits. Make certain they are insured to value.
- Co-insurance applies. Producers need to insure at 90% of their total livestock numbers in each class and keep their broker updated as they buy and sell.
Frequently asked questions
Does livestock insurance cover disease outbreaks?
No. A standard livestock policy does not respond to sickness or disease. The only way to insure against that is a separate, stand-alone full mortality policy, where each animal is vet checked and its value agreed upon with the insurer.
What does livestock insurance not cover?
It depends on the peril, but there are consistent gaps. Theft doesn’t cover escape, mysterious disappearance, or shortages found during an inventory count. Weather coverage doesn’t extend to losses from wind-driven snow or rain, or to animals that die from huddling, piling or suffocation, even during a covered weather event.
How do I prove a stolen animal for an insurance claim?
The loss has to be reported to police, and there needs to be a visible sign of theft, such as cut wire, open gates, vehicle tracks, or other tampering. Tagging animals and recording pasture counts, along with branding, helps support a claim and has also helped catch thieves when branded cattle are verified at auction.
Can I insure cattle, horses and poultry under one policy?
Yes. All named perils livestock coverage can be placed on your main farm policy, with each type of livestock carrying its own coverage line and limit. Liability coverage extends from that same main policy.
Why would a producer buy livestock insurance right now?
High market prices for livestock are a major driver at the moment. Other common triggers include a prior fire or flood loss, an uninsured loss of one or two animals, or simply being new to the industry and wanting to protect that investment from day one.
Is it worth using a broker instead of buying a standard policy?
Yes. There are more coverage options available than a generic form typically offers, and going it alone carries risk. Producers who buy coverage off a form sometimes only discover at claim time that they didn’t have the protection they actually needed.
Livestock insurance has more moving parts than it looks like from the outside, and the gaps between what people assume and what’s actually written into a policy are exactly where claims get complicated. That’s the kind of detail our farm advisors walk through with every prairie producer, so nothing gets discovered for the first time during a claim. We’ll take care of it. If you want to review your own farm insurance coverage, our team is ready to help.
