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|name         = IAO Guidelines
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|title        = IAO Guidelines
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|header1 = Cash Grain Farms; Field Crop Farms
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|label2  = LOB:
|data2   = Property & Casualty
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|label3  = IAO Code:
|data3   = 0190, 0110
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|label4  = Referral:
|data4   = R1
|label5  = Wordings:
|data5   = See List
|label6  = Rate:
|data6   = See Table
|label7  = Risk Level:
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|label8  = Insurers:
|data8   = CGL - Temple<br />
Property - Temple/Echelon/Inter-Hannover
|label9  = Endorsements:
|data9   = CGL 
|label10 = Comment:
|data10  = Delivery
}}

==RELATED CLASSIFICATIONS==

--Farming - Custom Harvesters 

--Farming - Vegetables and Melons 

--Feedlots 

--Gasoline Stations - Full-Service and Self-Service 

--Grain Elevator Operations 

--Roofing Contractors

==RISK DESCRIPTION==

Grain plants are one of the most important food sources known to humans. In fact, the discovery that grain could be cultivated may have been the catalyst propelling humankind toward civilization. Around 7,000 BC, people living in Mesopotamia (i.e., an area of southwest Asia) learned that certain strains of wild barley and wheat could be planted, grown, harvested, and subsequently used to make flatbread, cereal, gruel, and porridge. Barley probably was the first grain to be cultivated in northern Europe because it was able to grow in poor soil and could withstand harsher climates and higher altitudes. Consequently, people no longer had to travel from place to place in search of food (i.e., hunt and gather); they could settle down in one location, till the land, and domesticate animals. The domestication and cultivation of wheat was so successful, that today, no wild wheat can be found growing in nature. 

Grains are the seeds or the fruit (caryopses) of various food plants of the grass family (Gramineae). Rice, corn (maize), wheat, oats, barley, and rye are all grains, although the term "grain" commonly is used for other plant species not belonging to the grass family, such as buckwheat (an herb) and soybeans (a legume). 

Rice, corn, wheat, oats, and barley have long been important food staples in the human diet throughout the world. The United States Department of Agriculture (USDA) recommends that the average adult's daily diet consist of between six and eleven servings of grains and foods from the grain group (i.e., bread, cereal, pasta). Grains are nutritious foods; they are high in fiber and complex carbohydrates, high in certain vitamins, and low in fat. Most grains, such as wheat, corn, and rice, are a moderate source of incomplete protein; when combined with other foods such as legumes and squash, they provide the 20 amino acids necessary for complete protein. Native Americans called corn, beans, and squash the "three sisters of life." Grains also are a source of vitamins and minerals, such as thiamine, niacin, iron, zinc, riboflavin, selenium, and magnesium. 

Grains can be left whole or milled to various degrees to produce different types of groats, grits, meals, and flours, or they can be used in the production of various kinds of breads, breakfast cereals, pasta, baked goods (e.g., cookies, cakes), snack foods (e.g., corn chips, popcorn, crackers, rice cakes), animal feed, starch, sugars, industrial oils, and food oils. High fructose corn syrup is the most frequently used sweetener of soft drinks manufactured. Corn oil and canola oil have become very popular with consumers who are watching their cholesterol levels. Grains also are used in the manufacture of alcoholic beverages, industrial alcohol, and for other industrial applications. For example, corn by-products may be used to manufacture packing materials, ink, paints; as a substitute for phosphate used in laundry detergents; and as calcium magnesium acetate (CMA), a road de-icer; additionally, cornstarch frequently is added to paper to improve its printing properties. 

For insurance purposes, a cash grain farm can be classified as either a personal or commercial line risk. Grain farms can be operated as family businesses, or they can be large commercial operations. They vary in size from small family farms with fewer than five employees to large operations with 50 or more employees. However large or small the operation, basic facilities found on all grain farms include grain storage areas (e.g., tanks, bins, or silos), storage buildings for heavy machinery and equipment (barns and outbuildings), and greenhouses. Small family farms will have the farmowner/operator's home on the premises. Other larger and company-owned farms may have some type of administration building.

==NARRATIVE LINES OF LIABILITY==

===General Liability===

The General Liability exposure for grain farms will be slight. Although most insureds will not have many visitors, the size of the farm and the area that it encompasses may be so large and remote that hazards will be difficult for the farm operator to control. Heavy farm machinery, confined spaces in bins, tanks, and silos, and uneven walking surfaces will pose hazards to visitors. If the insured allows the premises to be used by third parties for recreational purposes, such as snowmobiling, hunting, fishing, hiking, or camping, the General Liability exposure will increase. 

What are the average and maximum numbers of daily visitors to the insured's farm? Normally, there are not many visitors to a farm, though occasionally veterinarians, pickup and delivery personnel, county and state agricultural agents, chemical applicators, mechanics, and inspectors will be on the premises. Though unlikely, the insured may offer tours to groups such as 4-H Clubs or to groups of school children. Does the insured offer tours? All visitors must be supervised by a farm employee; extra supervision should be provided when children are on the premises. Tour groups should have at least two employees accompanying the group at all times. 

Though rare for insureds that grow grain exclusively, some farmers may have an orchard or a fruit or vegetable patch for a "pick-your-own" operation to make extra money. Does the insured have a "pick-your-own" business? If so, what are the average and maximum numbers of daily customers? If the insured has such an operation, the General Liability exposure will increase. For more information, see the General Liability sections of the Farming - Orchards and Farming - Vegetables and Melons classifications. 

Farm equipment and facilities may be considered an attractive nuisance. Children may climb on machinery left in fields and fall, injuring themselves on machine parts, or cutting themselves on sharp surfaces. Does the farmer leave machinery out in fields when not in use? Accidents involving machinery and children may impose strict liability on the insured. Equipment should be kept in a garage, storage shed, or a locked, fenced area when not in use. Silos, bins, tanks, and other farm facilities also may be considered attractive nuisances to children who may climb in and around these structures. Children and other visitors entering a silo or bin could be seriously injured by moving augers, they could suffocate from toxic fumes or lack of oxygen, or they could be engulfed by moving or caked grain. Silos, bins, and tanks are confined spaces and therefore, pose a danger to any entrant. See the Workers' Compensation section of this classification for more information on the hazards of confined spaces. Because the cost of fencing is very high, many farms will not be completely fenced. The insured, however, should post "No Trespassing" and "Danger - Do Not Enter" signs around the perimeter of the property and on farm structures, as appropriate. Are such signs posted? 

Farm machinery may injure visitors who get in the path of equipment in operation. Machinery also may malfunction and injure visitors. Are visitors prohibited from areas where farm equipment is in operation? Visitors should never be allowed to ride on a piece of farm machinery (most tractors and self-propelled farm machines are designed for only one person). Visitors should be prohibited from areas where chemical agents or fertilizers are being applied or have been applied; chemical storage areas also should be off-limits. Does the insured post signs indicating chemical storage areas? Are warning signs posted where chemicals have been applied recently? It is a positive underwriting sign if the insured follows EPA guidelines on reentry intervals after applying pesticides. See the Workers' Compensation section of this classification for more information. 

Recreational exposures can be considerable on a farm. The premises may be used for swimming, boating, hunting, fishing, hiking, camping, snowmobiling, horseback riding, by people driving off-road vehicles, as ascent and landing fields for hot-air ballooning and as landing fields for skydiving operations. Recreational use of the land may or may not be with the permission of the insured. It may involve a written contract, but verbal agreements also are common (e.g., people may be permitted to ride their horses on the land if they board their horses on the farm). Have any hold-harmless agreements been signed? What is the insured's practice? 

Off-premises use of self-propelled farm vehicles is covered under General Liability. Does the insured drive harvest machinery or farm machinery on public roadways? Farm equipment should be properly flagged when driven on roads; drivers should be instructed to stay to the right of the road and travel on the shoulder, if possible. The insured also should attach slow-moving vehicle signs and emergency lights on farm machinery used on public roads. The National Safety Council recommends that the slow-moving vehicle (SMV) emblem be attached to the rear of farm machinery; complementing the SMV sign should be emergency lights to warn people of wide loads and frequent turns. What is the insured's practice? Does the insured farm several noncontiguous parcels of land? If so, the likelihood of operating slow-moving farm vehicles on public roadways will increase. Is the insured in compliance with all federal, state, and local regulations regarding the use and operation of slow-moving farm vehicles? 

Slips, trips, and falls are common on a farm. There may be unpaved, gravel, or dirt roads and walkways on the premises; farm fields may be muddy, or may have crop debris and roots present that could result in injuries caused by slips and trips. Many farms will have trenches, ditches, and wells on the premises that a visitor could fall into. If the insured also raises livestock, animal manure on the premises also will increase the exposure. Does the insured accompany visitors while they are on the premises and require them to use only designated paths for traveling within the farm? What is the level of housekeeping in barns and outbuildings? Where practical, are designated paths and roads, as well as walkways in and around buildings, kept clear of obstacles and debris? Are all indoor spills mopped up promptly? 

When not in use, all cutting attachments, spare pieces of equipment, and tools (e.g., hoes, rakes, shovels, and pitchforks) should be stored where they will be least likely to cause injuries to visitors. People could trip and fall over such items if they are left lying around (either in buildings or outside on walkways or in fields). They could be cut or injured by the sharp edges of tools and equipment. Where does the insured store tools and equipment when not in use? Does the insured maintain an inventory control system to reduce the likelihood that tools and equipment will be left in fields or areas other than storage? 

Fires and explosions could affect adjacent properties and cause large losses if they are located nearby; however, this rarely will be the case. Farmers sometimes burn the residue of a harvested crop to clear the field for spring planting. The farmer may lose control of the fire, and it may spread to adjacent properties. Does the farmer burn crop residues? This practice is a negative underwriting sign and should be discouraged. Grain dust explosions can be particularly violent, generating shock waves that may be felt miles away from the point of origin on the grain farm (e.g., silos, tanks, or bins). These shock waves often cause damage to nearby property. Grain silo fires can be difficult to control and extinguish. How close are the insured's grain storage structures to adjacent properties? What is the insured's loss history? What is the level of fire and explosion prevention measures taken by the insured?

Does the insured also raise livestock on the premises? If so, visitors could be injured by animals; horse kicks or bull goring could be fatal or cause serious injuries. Even chickens and other poultry could bite and scratch young children. All animals should be kept in locked/secured pens, corrals, stalls, and fenced pastures. 

Visitors may experience allergic reactions to various plants, insects, snakes, and pesticides while on the premises. Is the insured or the insured's employees trained to recognize the signs of potentially dangerous allergic reactions? Are first aid supplies readily available? Visitors should not be permitted in remote areas unsupervised. Does the insured post signs in prominent places alerting visitors to potential hazards? See the General Liability section of the Botanical Gardens classification for more information. 

Grain farms may have contracts with pesticide applicators, aerial application contractors, equipment repair personnel, suppliers, and distributors. The underwriter should examine all contracts and determine what extent of liability is assumed by the insured. Have any hold-harmless agreements been signed? 

Are designated parking areas for visitors free of potholes, well-marked, and well-lit, particularly if the insured hosts night-time events (e.g., Halloween hayrides, Christmas sleigh rides)? Have arrangements been made for the prompt removal of snow and ice?

===Products Liability and Completed Operations===

The Product Liability and Completed Operations exposure for grain farms will be slight. There is the possibility of contaminated grain; however, grain that is sold to a grain elevator or mill is inspected by the Federal Grain Inspection Service (FGIS) before the shipment is accepted. Also, grain elevators and mills typically mix different shipments of grain in their storage facilities; therefore, once a shipment is accepted and stored, it will be almost impossible to trace contaminated grain back to the specific producer. 

Though unlikely, postharvest decays of grain may lead to sickness and even death in humans and livestock who may consume the spoiled grain. Mycotoxins are produced as the result of postharvest decaying of fruits, vegetables, and grain, and they can induce mycotoxicoses (i.e., diseases in humans and animals caused by consumption of foods and feeds invaded by fungi that produce mycotoxins). The symptoms caused by mycotoxicoses vary widely with the amount of toxin consumed and the age and health of the person or animal that consumed it. Generally, very young, very old, and sick people and livestock will be more susceptible to the negative health effects of mycotoxins. 

One of the potentially dangerous mycotoxins, aflatoxin, produced by the widespread Aspergillus fungi, may infect cereal seeds, particularly those grown in warm or humid conditions or those infested with insects. Aflatoxin may cause nausea, weakening, loss of appetite, and possibly, liver cancer in humans. Serious illness and death also is common in young livestock fed grain infected with aflatoxin. Other potentially dangerous toxins sometimes found in decaying grain and animal feed are yellowed-rice toxin, tremorgenic toxins, and ochratoxins. These toxins may be associated with various health problems and diseases in humans and livestock, such as necrosis and degeneration of the liver and kidneys, cardiac beri-beri, nervous system and circulatory system disorders, and seizures. 

Proper storage will reduce the incidence of postharvest decays, as well as insect and rodent infestation. Low humidity and clean silos are important in grain storage. Bins and vehicles used for grain storage also should be clean and free of debris. The insured must take steps to ensure that bins, silos, and vehicles are completely empty and that old grain is not present which could mix with and contaminate new grain. Does the insured ever store excess grain out in the open in piles on the ground? Such practice should be discouraged, as it increases the chance of grain decay, infestation, and contamination. What measures does the insured take to preserve grain quality? 

Stored grain is susceptible to insect infestation. Not only does insect infestation affect the overall sanitary and aesthetic quality of the grain, it makes it more prone to decay. Grain farm operators may use fungicides and pesticides to control pest or insect infestations.

Does the insured sell goods at a roadside stand? Some insureds may sell items at a roadside stand, such as produce, fruits, eggs, smoked or cured meats, or cheese; homemade baked goods, pickles, jams, jellies, and preserves; ciders and canned fruits and vegetables. A few insureds may also sell nonfood items, such as quilts, clothing, handcrafted gift items, and cut/dried flowers. The insured's Product Liability exposure will increase if homemade goods are sold at a retail stand. There is a possibility of foreign objects in homemade baked goods, canned goods, jams, preserves, and pickles. In addition, if canned goods and preserves are not processed properly, there is a chance that a consumer of these goods will develop food poisoning. Also, produce that has been sprayed with pesticides presents an additional Product Liability exposure. Perishable food items must be properly handled and stored.

===Environmental Impairment Liability===

Grain farms, particularly large operations and those that use many chemicals, will have a moderate Environmental Impairment Liability exposure. Besides agricultural chemicals, other sources of pollution include animal waste, refrigerants, fuels, and solvents. Contamination of water sources is a serious concern in this line. 

Grain farms frequently use a variety of nonorganic fertilizers, pesticides, and herbicides, many of which can cause environmental damage if not used according to label instructions. Farms which are totally organic will have a much lower exposure. The underwriter should obtain a list of all the chemicals used by the insured and their methods of application. Most states have stringent certification requirements that farmers must meet to be qualified to spray chemicals or use fertilizers. Is the insured qualified to apply such substances, or are commercial applicators hired? It is a positive underwriting sign if the insured contracts out this service. Are all of the chemicals used by the insured approved by the EPA? Are any chemicals used by the insured on the EPA's restricted use or community right-to-know lists? These chemicals require special handling and care. The insured must follow all label instructions and precautions, as well as any state regulations, when mixing, applying, storing, and disposing of chemicals. What training does the insured have in the handling and use of pesticides, herbicides and fertilizers? Many farmers perform their own routine maintenance on farm machinery and vehicles. Engine oil and other toxic substances, such as antifreeze, cleaning solvents, or lubricants, are common by-products of maintenance work. Proper disposal of such chemicals is essential. What are the insured's handling and disposal procedures for such materials? Does the insured have hazardous waste properly disposed of by a licensed hazardous waste hauler? 

If the insured performs his or her own chemical spraying, proper mixing and spraying procedures must be followed. Chemicals should be mixed in an area that has an impermeable floor with dikes that drain into a tank or sump. Where does the insured mix chemicals? How does the insured apply chemicals to crops? Most farms will apply chemicals by tractor or by spray hose. Anti-backflow devices are recommended for spraying equipment. The chemical sprayer should be washed in the field, and the rinse water sprayed on a labeled location. What cleaning procedures does the insured follow? 

Very large farms may hire aerial application contractors to apply pesticides or herbicides to crops. Does the insured ever have chemicals applied to crops by airplane? If done by airplane, it may be more difficult to limit chemical drift. The underwriter should examine the certification, training and experience of all chemical application contractors. For more information on aerial application, see the Aerial Application Contractors write-up. 

Where and how does the insured store chemicals? Chemical storage facilities should be at least 300 feet from the insured's well. Chemicals should be stored in separate storage sheds with impermeable floors and dikes to contain spills. Are chemicals kept in original, leak-proof containers, and are lids tightly attached? What kind of chemicals does the insured store on the premises? Dry chemical formulations pose fewer hazards than liquid chemicals. Recyclable chemical containers also are recommended because the insured can return them to the dealer after use and not be concerned about their proper disposal. Does the insured have a recycling agreement with the chemical supplier? Is the local fire service aware of the kinds of chemicals stored on the premises? Firefighters may choose to let chemical fires burn rather than risk environmental damage due to runoff water. 

How close are the insured's operations to wells, groundwater supplies, rivers, lakes, and other water sources that could receive runoff from leaking tanks, spills, overapplication or misapplication of chemicals, and animal waste? Contamination from farm wastewater and runoff has the potential to become a serious exposure, as the runoff could contaminate groundwater, wells, lakes, and streams - killing fish, closing beaches, and leaching into drinking water supplies. 

Insureds that also raise livestock as an ancillary operation will have an increased Environmental Liability exposure, due to the amount of animal waste generated. If the insured raises livestock, determine the method used for disposing of manure from animal barns, pens, or corrals. Failure to properly treat and dispose of animal waste may result in complaints by neighbors about odors and stream, river, lake, and groundwater contamination. Ultimately, it could lead to investigations by the local health department. Recent beach closings and prohibitions on fishing in Maryland and Virginia resulted from the runoff of animal waste from local chicken farms into nearby streams and rivers. What is the insured's loss history? For additional information, see the Environmental Impairment Liability section of the Feedlots classification. 

Much of the insured's machinery will be powered by fuel, usually diesel fuel; the insured may have underground or aboveground fuel storage tanks on the premises. Underground fuel tanks pose a more serious hazard since leaks may not be detected until serious damage has occurred. What kind of fuel storage tank does the insured use? The age, type, and condition of each storage tank should be assessed. The tanks, pipes, and fittings should be of a material that is compatible with the substance to be stored. How often is the ground around the tanks tested for contamination? The tanks and all seals should be tested periodically for cracks and leaks. What test procedures does the insured use? Is the insured in compliance with EPA Standard for Underground Storage Tanks; Technical Requirements? If not, what steps are being taken to meet the EPA standard? Has the insured ever been found liable for violating EPA regulations or paid an Environmental Liability claim? If so, this is a negative underwriting sign. The insured's loss history should be determined.

===Automobile Liability===

The Automobile Liability exposure for grain farms will vary, depending on the size of the operation and on whether the insured transports grain to buyers. Most grain farms will have at least one grain truck and one service truck, though many may have more. Depending on the size of operations, insureds may have several dump trucks, pickup trucks, and tractor trailers. Agricultural machinery, such as combines and cutting heads, will be covered with a Mobile Agricultural Equipment Floater, which will be discussed under Inland Marine. Overall, the Automobile Liability exposure for this classification will be moderate. 

What are the ages, type, number, and condition of the insured's vehicles? Grain farm operators typically will use owned vehicles (i.e., automobiles, pickup trucks, and vans) to run errands. To transport grain from the field to the local grain elevator, the insured will have dump trucks or tractor trailers. Are the insured's vehicles owned or leased? Some insureds may use public carriers for large shipments of grain. 

What is the insured's radius of operations? Some grain farms may be extensive, encompassing over 2,000 acres, located primarily in rural areas. Also, many farmers may own noncontiguous plots and fields that may be more than 20 miles apart from the main farming area. However, most insureds' travel will be local. If the insured makes deliveries of grain to elevators, how close is the nearest grain elevator with which the insured does business? 

Determine the age, experience, and training of all drivers; obtain MVRs. Many duties associated with farm operation require driving; employees may drive tractor trailers, dump trucks, service trucks, and company-owned automobiles. Truck drivers must possess commercial driver's licenses. Does the insured allow underage drivers to operate farm vehicles on the premises? In some provinces, individuals may obtain special licenses to operate farm vehicles as young as the age of 14. The insured may have a Youthful Operator exposure. Are the insured's drivers qualified to drive the various vehicles owned by the insured? Employees often will be driving on unfamiliar roads and dirt farm lanes. Driver training is an essential part of risk management. If personal vehicles are used for company business, a nonowned automobile exposure exists; obtain certificates of insurance. 

Are the insured's vehicles inspected regularly, well maintained, and repaired promptly? Who is charge of vehicle maintenance? All vehicle repair and maintenance should be contracted out to qualified, licensed mechanics. Where are vehicles stored when not in use? Are vehicles stored in a locked garage or a well-lit, fenced parking area? Many insureds will not store vehicles in garages but rather will park vehicles outdoors. What is the insured's practice?

===Professional Liability ( E&O )===

Not applicable.

==NARRATIVE LINES: PROPERTY==

===Fire and E.C.===

The Fire and E.C. exposure for grain farms will vary depending on the size of the operation and the number and location of buildings on the premises. Grain farms will have several ignition sources, including faulty wiring, smoking, and space heaters; grain dust, and the vapors of certain fertilizers, chemicals, and fuels will present an explosion hazard. The fire load primarily will consist of stored grain, hay, manure, chemicals, fuels, fertilizers, and wooden buildings or structures. Overall, the Fire and E.C. exposure for grain farms will be significant. 

What are the age, type, number, condition, and construction of the insured's buildings and structures? Basic facilities found on all grain farms include grain storage areas (e.g., tanks, bins, or silos), storage buildings for heavy machinery and equipment (barns and outbuildings), and greenhouses. Small family farms will have the farmowner/operator's home on the premises, which will be covered under an individual farm/ranch owner's (F&R) policy. Other larger and company-owned farms may have some type of administration building. Many farm structures, such as barns, commonly are made out of wood frame construction; however, silos typically are made out of concrete, and grain storage bins usually are constructed of metal. Some storage sheds and buildings also may be constructed of corrugated metal sheeting over metal or frame construction. 

The main ignition source will be faulty wiring in buildings and structures. In the past, many farms were exempt from complying with local electrical codes; therefore, farmers may have wired some outbuildings themselves. What is the condition of the insured's wiring? Rodents can cause damage to electrical wires by gnawing on them. What type of rodent control program does the insured have in place? An alternative is to have all electrical wiring in rigid conduit, though the cost likely is prohibitive for most small grain farms. Is the insured's wiring in compliance with National Electrical Code? All wiring should be properly insulated and grounded. 

Farmers may use space heaters in barns and other outbuildings that do not have permanent heating systems installed. The use of space heaters is a negative underwriting sign, as these appliances can tip over easily and ignite nearby flammable materials, such as hay, wood shavings, and manure. Also, space heaters may short out and overheat on their own, especially if the building they are being used in was wired improperly. If the insured does use space heaters, are they equipped with automatic shut-off devices (when tipped over)? Heaters should never be operated in confined spaces or areas that contain potential explosives, such as fertilizers, fuels, and chemicals. Space heaters should never be left unattended while they are in use. The use of kerosene space heaters is especially dangerous, as these models have been known to explode and have been responsible for numerous fires. 

Smoking should be prohibited throughout the farm facility because of the large amounts of flammable and combustible materials typically present inside storage structures and out in the fields (crops). Lit cigarettes or ashes dropped carelessly could set barns or silos on fire or cause an explosion. Are "No Smoking" signs posted prominently throughout the facilities? Some insureds may designate an area on the premises for smoking. This area should be located away from all flammables and combustibles and should be equipped with self-closing, fire-resistant receptacles. 

Lightning strikes also are a possible ignition source on farms. In many cases, the farm buildings and structures are the tallest objects in the area. The insured should equip taller buildings and structures, particularly silos, with properly grounded lightning arrestors. What is the insured's practice? 

Grain dust in silos and bins presents an explosion hazard. For an explosion to take place, ignition must occur in an enclosed space that contains a sufficient concentration of grain dust. If grain dust is ignited outside of an enclosed space, a flash fire may occur instead. Grain explosions and flash fires can be particularly violent and damaging; ignition sources in areas where grain dust is present must be prevented or eliminated, if at all possible.

Decay in any organic material is an oxidation process that releases heat and provides a source of ignition. Grain farms control this primarily by storing grains at moisture and temperature levels, which will not only prevent spontaneous combustion, but will keep the grain from deteriorating in quality. Grain may be put through a dryer and aerated before storage. Grain piled outdoors creates a special hazard because it is more likely to ignite spontaneously. What measures does the insured take to prevent or control the oxidation process? 

Because of the manner in which flowing grain can erode processing and handling equipment, such as chutes, spouts, bins, and tanks, maintenance must be performed routinely to fix cracks, splits, and holes that develop. Usually, such maintenance and repair tasks include hot work (i.e., welding, cutting, and brazing). Hot work is a serious ignition source, causing fires and grain dust explosions if not performed properly; special safety procedures must be followed. How often is hot work done on the insured's premises? Does the insured have farm workers perform hot work, or is such work contracted out? Before starting hot work, all flammable and combustible materials should be removed from the work area, and the work area atmosphere should be free of grain dust and any other explosive or combustible gases. This is especially important if work is to be done in a confined space, such as a tank, silo, or bin. Have all hot work employees received proper fire and explosion prevention training? 

The process of drying grain also presents a fire and possible explosion hazard. A grain dryer is direct-fired; that is, the heat of the burned fuel is directed into a stream of air that is passed directly through the moist grain. Problems may develop when material that collects in dryer screens, racks, and columns is not removed due to improper cleaning and maintenance of equipment. These blockages can overheat and ignite if the burner temperature gets too hot, resulting in a grain fire, and possibly, a subsequent dust explosion. Grain fires can be difficult to extinguish and may smolder and reignite days after the original fire occurred. How often is the insured's grain dryer cleaned and inspected? Who is in charge of grain dryer maintenance, and what are their training and experience? Does the insured use temperature sensors, ultraviolet (UV) flame detectors, and fuel train safety devices to minimize the likelihood of grain fires? If the insured uses outside contractors for machinery maintenance, are they in compliance with state and local licensing and certification requirements? 

Farmers sometimes burn the remains of a harvested crop to clear the field for planting. The farmer may lose control of these fires, and they may ignite nearby buildings. Does the insured ever burn the remains of crops in the fall? This is an especially hazardous time because there is so much dry and dead plant material. How does the farmer control the path of the fire? The insured should consult with the local forestry service or fire department prior to burning fields. There are times when burning is forbidden, even if state statutes allow it; this gives local authorities some control in case of very dry weather. 

Fuel and flammable solvents and chemicals will contribute to the fire load. Is the insured in compliance with NFPA 30, Flammable and Combustible Liquids Code? The insured may have either an aboveground or underground fuel storage tank to refuel farm machinery and power equipment. What type of fuel does the insured use, and what are the average and maximum quantities of fuel stored on the premises? Are fuel tanks located far from all ignition sources? Are tanks and pumps protected from vehicle damage by concrete posts? LP-gas cylinders should be kept outside buildings. Fuel storage containers, pipelines, hoses, valves, and gauges should be properly maintained and checked for leaks periodically. 

Exposed urethane or polystyrene insulation contributes significantly to the fire load in agricultural building fires. Underwriters should recommend that such insulation be prohibited in agricultural buildings. If used, this insulation should be covered with a material, such as half-inch drywall or plywood, which will provide a minimum 15-minute fire rating. With what are the insured's buildings insulated? 

Some agricultural chemicals, such as chlorate salts, ammonium nitrate fertilizers, and kerosene-based insecticides and fuels, pose fire and explosion hazards. Anhydrous ammonia, a common farm fertilizer, is not very flammable by itself, but it does present an explosion hazard, especially if mixed with certain other chemicals (e.g. potassium chlorate, nitrogen oxide). Solvents and chemicals with low flash points should be stored away from all ignition sources; workers should never mix products unless labels explicitly call for blending. All chemicals and solvents should be kept in well-ventilated, dry areas that are used exclusively for the storage of chemicals. Are these storage areas locked, and is access limited to those workers who have been trained in the proper handling of chemicals? Storage methods and the safeguards to be taken are outlined in NFPA Standard for Storage of Pesticides in Portable Containers. If the insured uses ammonium nitrate fertilizers, they should be stored according to the requirements specified in NFPA Standard for the Storage of Ammonium Nitrate. What types of chemicals does the insured store on the premises, and in what amounts are they used? Are all chemicals stored in a separate chemical storage area? 

Depending on their location, grain farms may be susceptible to wind damage and tornadoes. The underwriter should assess the ability of the insured's structures to withstand high winds. Does the insured maintain buildings so that no pieces of roofing or other building materials are loose? Some grain farm structures may have long, flat roofs on which snow and ice may accumulate. The weight of ice, snow, and sleet may cause the collapse or partial collapse of a roof. What are the age, type, and construction of the insured's roofs? What is the insured's loss history? 

What is the response time of the local fire service? Some grain farms are located in remote or rural areas. Does the insured have access to a sufficient water supply for use in extinguishing fires, particularly in summer months? Some farms may have a pond on the premises that may be used for fighting fires. This becomes particularly important if local water resources (e.g., a fire pond with approved suction points) are needed to supplement fire service tank trucks, as may be the case in many rural areas. Are the local fire and emergency services familiar with the hazards associated with fighting grain fires and the violent nature of dust explosions?

===Business Interruption===

The Business Interruption exposure for grain farms will be slight. This line of insurance rarely is written for farming risks. The most common source of loss will be crop failure, which will be covered under Crop Insurance. Farm buildings and equipment should be relatively easy to rebuild and replace. However, the loss of certain pieces of equipment such as planters and combines, would present a business interruption exposure if the loss were to occur during a peak season (e.g., planting or harvesting season). The loss of equipment, however, will be covered under Inland Marine; see the Inland Marine section of this classification for more information. 

Most insureds will farm large tracts of land; because of the extensive premises requirements, insureds will not be likely to relocate. Land used for farming is rarely contaminated beyond usefulness. Additionally, many insureds have their private residence on the premises, and will not wish to relocate. How long would it take the insured to rebuild necessary farm buildings sufficient to operate the farm at pre-loss levels? 

The loss of harvesting and planting equipment (e.g., combines, harvesters, tractors, plows) during busy seasons, such as spring and fall, may result in a business interruption for grain farmers. Once it is ripe, grain typically must be harvested quickly, otherwise, spoilage may occur. The weather plays an important factor in determining the best time for planting and harvesting; if the insured loses the use of machinery at optimal planting or harvesting time, he may not be able to plant or harvest the crops on time, leading to the possible loss of an entire crop needing to be harvested, or the inability to get a crop "in the ground" in time for its seasonal planting period. However, the insured subsequently may be able to plant a different cash crop on that same land. Also, many insureds may be able to borrow or lease the necessary equipment to plant or harvest. Insureds also may contract with a custom harvesting business, which will harvest crops for farmers for a fee; in fact, this is standard practice for many smaller insureds. What is the insured's practice? 

Farm buildings often are located close together; fires that ignite one structure can spread easily to other farm buildings. In this case, the insured may suffer a total loss, and all facilities will need to be rebuilt. This will extend the period of restoration. However, barns and storage sheds will not take long to rebuild, and the insured may erect temporary housing and other structures (e.g., mobile homes, trailers) on the premises while permanent structures are being rebuilt. Silos may take slightly longer to rebuild. Some insureds may have agreements with a local grain elevator and neighboring farmers to use a portion of their facilities for storage of harvested grain and equipment. Does the insured have such an arrangement with another farmer and/or grain elevator?

===Inland Marine===

The Inland Marine exposure for grain farms will vary, depending on whether the insured owns expensive agricultural machinery (such as combines) and on the extent to which the insured relies on computers to conduct operations. Insureds that own combines will have a higher Inland Marine exposure than those insureds that do not. The insured also will probably transport shipments of grain and will have an Accounts Receivable and Valuable Papers and Records exposure. Overall, the Inland Marine exposure for this classification will be significant. 

The insured's agricultural machinery will be covered under a Mobile Agricultural Equipment floater, which provides "open perils" coverage. Almost all farms will have some type of mobile equipment such as tractors, plows, tillers, seeders, fertilizer spreaders, and pesticide applicators. What are the number, ages, types, and condition of the insured's mobile agricultural equipment? A top-of-the-line tractor may cost approximately $100,000. Combines may be covered under the Mobile Agricultural Equipment floater, or they may be specifically scheduled separately by endorsement under the Inland Marine policy. Combines can be very expensive, costing anywhere from $150,000 to $250,000. The value of the insured's machinery and attachments should be determined. Some insureds may not consider it cost effective to own such an expensive piece of machinery that they need only several weeks out of the year. These insureds may contract with custom harvesters for harvesting operations or rent/lease combines. Does the insured own one or more combine(s)? 

What are the inspection and maintenance schedules of the insured's mobile equipment? Most farm operators will have at least a basic knowledge of mechanics. In many cases, farmers will attempt to repair their own machinery before contracting the work out to a mechanic, unless the machinery is under warranty by the manufacturer. What are the qualifications and experience of the insured's mechanics? Does the insured or his or her employees perform routine maintenance and make minor repairs on mobile equipment? If so, what are their training and experience? 

Combines and tractors can catch on fire while they are in operation, resulting in heavy damage or even a total loss to the machinery. The most often recommended prevention measure is machine and engine cleanliness, with particular attention paid to the engine and engine compartment, as that is where over 75% of all machinery fires start. A clean engine will run cooler, thus reducing the likelihood of it overheating, which is a potential ignition source. Also, dry chaff, leaves, and other material will easily ignite if exposed to a heat source. The insured should clean the combine or tractor frequently by blowing off any collected material with compressed air. In addition, any plant material that has become entangled on bearings, belts, and other moving parts should be removed promptly. A properly lubricated and maintained machine also will be less likely to overheat. The combine or tractor should be checked periodically for loose or exposed electrical wiring, leaking hoses or fuel, blown fuses, and worn or missing bearings, belts, and chains. Also, the insured should keep annually tagged and inspected Class ABC dry chemical fire extinguishers (ten-pound units for combines and 5-pound units for tractors) where they can be reached easily by the operator. At least two fire extinguishers are recommended for combines - one mounted inside the cab and one located where it can be reached from the ground. What is the insured's practice? 

Farm equipment and machinery that is in storage also is subject to the perils of fire. If the insured stores all equipment and machinery in one building or barn, the chance of a total loss increases. The underwriter should recommend that combines and tractors be stored in separate structures, if possible. See the Fire and E.C. section of this classification for more information on fire hazards and prevention measures. 

Because farm equipment often will be operated on unpaved roads and bumpy, uneven fields, it will be susceptible to damage. However, most farm equipment will be designed specifically for use on these types of surfaces, which will mitigate this exposure. Does the insured transport or move harvesting or farm machinery over public roadways? Farm equipment should be properly flagged when driven on roads; drivers should be instructed to stay to the right of the road and travel on the shoulder, if possible. The insured also should attach slow-moving vehicle signs and emergency lights on farm machinery that is driven on public roads. The National Safety Council recommends that a slow-moving vehicle (SMV) emblem be attached to the rear of farm machinery; complementing the SMV sign should be emergency lights to warn people of wide loads and frequent turns. What is the insured's practice? Does the insured farm several noncontiguous parcels of land? If so, the likelihood of operating slow-moving farm vehicles on public roadways will increase. Is the insured in compliance with all federal, state, and local regulations regarding the use and operation of slow-moving farm vehicles? 

Many farmers will leave equipment in fields for extended periods of time where it will be exposed to damage from weather conditions such as snow, ice, hail, and rain. Machinery left outside also will be a target for vandalism and theft. If possible, the insured should store machinery in a locked or padlocked weather-tight shed, garage, or barn. Where does the insured store farm machinery and equipment when not in use? To discourage theft or aid in the recovery of stolen property, all pieces of machinery and agricultural equipment should be marked with National Property Identification Code (NPIC) numbers in an inconspicuous area of the item. A detailed inventory list, including the NPIC numbers of all machinery, should be kept in an NRTL-listed, fire-resistant safe. 

The insured will need to transport harvested grain from the farm to the purchaser (e.g., grain elevators, feed mills). While many insureds will transport grain themselves, some will use contract carriers. If contract carriers are used, the underwriter should ascertain at what point ownership of the grain passes from producer to purchaser. Does the insured ship grain to customers? Determine the average and maximum values and the frequency of the insured's grain shipments. See the Inland Marine section of the Grain Elevator Operations classification for more information on grain shipment exposures. 

Insureds most likely will have valuable papers and records on the premises, such as licenses, pesticide certifications, EPA chain-of-custody documentation, and contracts for the sale of crops. Valuable Papers and Records coverage may be desirable. The insured also may need Accounts Receivable coverage if customers are billed for grain purchases. Copies of all important documents should be kept off premises in an NRTL-listed, fire resistant safe.

===Crime===

The Crime exposure for most insureds will be minimal, as equipment and inventory generally will not be attractive to thieves. There typically will be little cash on the premises. Combines and other heavy farm machinery will be covered under a Mobile Agricultural Equipment floater in Inland Marine. 

What are the average and maximum amounts of cash on the premises daily? Most grain farms will not have large amounts of cash on the premises; sales and purchases often are paid for by check or credit. However, most insureds will have petty cash on hand for making incidental purchases. What method of paying employees does the insured use? While many insureds will pay workers by check, some may pay workers (especially part-time or seasonal help) in cash. If the insured keeps cash on the premises for payroll purposes, the cash exposure will increase.

Stored grain can be expensive in the aggregate; however, the bulk and large amount of grain needed to constitute any value generally will make it unattractive to thieves. Fuel and hand tools may also be targets for theft. What measures does the insured take to prevent the theft of stored grain, fuel, and hand tools? The access doors and hatches for grain storage bins, tanks, and silos should be locked. Locks for fuel and tank pumps also are recommended. Hand tools should be stored in a locked shed or building when not in use. What type of inventory control system does the insured have in place? Does the insured mark tools in such a way, such as with an engraving tool or cold stamp, to help identify them if they are stolen and recovered? 

The insured will have a slight employee dishonesty exposure. Many grain farms are family-owned or sole proprietorships; if so, farm operators will do their own bookkeeping. However, pre-employment checks should be done on those employees who have access to cash, checks, bookkeeping records, safe and facilities keys, and tools. Periodic, unannounced audits should be conducted. What is the insured's practice? 

What is the level of premises security? Secured perimeter fencing is preferred; however, because of the large size of most farms, the cost of fencing will be prohibitive in many cases. If the farm is very large, there should be limited roadway access to the premises and ideally, an attended checkpoint or gate. Many farms will have guard dogs on the premises. Farm buildings, including storage structures for equipment, machinery, and grain, should be equipped with dead-bolt locks or padlocked, as appropriate. Are windows on these structures equipped with tamperproof locks? The premises also should be adequately lit at night. Although most insureds will not have one, an alarm system in buildings storing valuables is a positive underwriting sign.

==HAZARD INDEX==

{| {{table}}
| align="center" style="background:#f0f0f0;"|'''Line'''
| align="center" style="background:#f0f0f0;"|'''Best's Hazard Index'''
| align="center" style="background:#f0f0f0;"|'''Underwriting Comments'''
|-
| Automobile Liability||5||
|-
| General Liability||3||Higher if the insured hosts group tours or special events.
|-
| Product Liability and Completed Operations||1||
|-
| Crop Insurance||6||Potential for total loss of crops.
|-
| Environmental Impairment Liability||5||
|-
| Workers' Compensation||8||Possibility of serious injuries from the use of heavy machinery.
|-
| Crime||2||
|-
| Fire and E.C.: Property||6||
|-
| Business Interruption||3||
|-
| Inland Marine||6||Mobile agricultural equipment covered here.
|-
| 
|}

Low 1-3, Medium 4-6, High 7-9, Very High 10

==SPECIAL EXPOSURES==

-Hail storms 

-Confined spaces 

-Hazardous agricultural chemicals 

-Grain fires 

-Combines

==UNDERWRITER'S CHECKLIST==

===Liability===

What is the size and layout of the insured's farm? What types of grain does the insured grow?

Does the insured offer tours of the facility to groups, such as schools and 4-H Clubs? Does the insured ever host special events, such as harvest festivals or hayrides? Are all visitors properly supervised?

What ancillary operations does the insured run? Does the insured grow a "pick-your-own" patch of fruits or vegetables? Does the insured operate a retail stand where fresh produce and/or jams, jellies, and pickles or other products are sold?

Is the insured a full-time farmer, or does he or she have a secondary or primary occupation other than farming?

What pesticides, fungicides, herbicides, rodenticides, and fertilizers does the insured use? Who applies such substances, and are they certified to do so?

What methods are used to apply chemicals and fertilizers? Are aerial application contractors ever used? Is the insured in compliance with the Federal Insecticide, 
Fungicide, and Rodenticide Act (FIFRA) and all EPA regulations concerning the use, application, and storage of these materials?

Does the insured also raise livestock? If so, how is animal waste disposed of?

To whom does the insured sell grain - cooperatives, grain elevators, mills, and/or feed manufacturers?

===Property===

What are the age, type, number, and condition of the insured's mobile agricultural equipment? Does the insured own or rent a combine or contract out this operation?

What are the number, age, and experience of the insured's drivers? Does the insured allow any underage drivers with special farm licenses to operate farm equipment?

Does the insured ever burn the remains of a harvested crop to clear the field for the next planting season?

What are the average and maximum values of grain shipments? At what point does the insured relinquish liability for and ownership of the shipment?

===Comments on Economic Risk===

The underwriter should determine how long the insured is in the business, what their loss experiences are and what their revenues were in last three to five years. The underwriter should analyse these information to find out if there was anything to be of particular concern or there was any negative trend. The underwriter should determine if the insured relies heavily on one or two clients.

==RATING & GUIDE==

{| {{table}}
| align="center" style="background:#f0f0f0;"|'''Industry Description'''
| align="center" style="background:#f0f0f0;"|'''Rating Basis'''
| align="center" style="background:#f0f0f0;" colspan="5"|'''Rates for $1,000,000 Limit'''
| align="center" style="background:#f0f0f0;"|'''Exposure<br>Rating'''
| align="center" style="background:#f0f0f0;"|'''Referral<br>Symbol'''
| align="center" style="background:#f0f0f0;"|'''Temple'''
| align="center" style="background:#f0f0f0;"|'''Inter<br>Hannover'''
| align="center" style="background:#f0f0f0;"|'''UNDERWRITING COMMENTS & ENDORSEMENTS'''
|-
| ||||Atlantic||Quebec||Ontario||Prairie||Pacific||||||||||
|-
| Cash Grain Farms||# Basic||122.28||161.03||127.25||83.57||75.36||H||R1||T||I/H||
|-
| 
|}


==Forms==
===Casualty===
{|{{table}}
|CGL-0001
|Commercial General Liability
|}

===Excess===
{|{{table}}
|ECH-201
|Excess Liability
|}
===Professional Liability===
N/A
===Umbrella===
N/A

==Perils==
===Casualty===
====Standard CGL====
{|{{table}}
|43
|CGL-Form CGL-0001 REV.01/11/04
|Per Occurrence (2)
|Premium
|-
|21
|Automobile Non Owned
|Per Occurrence (2)
|Included
|-
|30
|Tenants Legal Liability (Broad Form) - limit any one premises
|Per Occurrence (2)
|Included
|-
|81
|Property Damage Deductible - any one occurance
|Per Occurrence (2)
|Included
|-
|88
|Personal Injury Limit
|Per Occurrence (2)
|Included
|-
|89
|Medical payments
|None (1)
|Included
|-
|92
|Bodily Injury Deductible-CGL-0194rev.26/8/02
|Per Claimant (3)
|Included
|}

====Additional Coverage====
{|{{table}}
|74
|Products Recall Extension
|Per Occurrence (2)
|50000
|-
|75
|Employment Practices Liability Extension
|Per Claimant (3)
|250000
|-
|76
|Faulty or Improper Workmanship Extension
|Per Claimant (3)
|25000
|-
|77
|Abuse - Legal Defense Cost Form
|Per Occurrence (2)
|50000
|-
|96
|Advertising Liability Extension
|Per Occurrence (2)
|
|-
|97
|SEF #94
|Per Occurrence (2)
|50000
|-
|98
|SEF #96
|Per Occurrence (2)
|
|-
|}

===Excess===
{|{{table}}
|50
|Excess Liability
|}
===Professional Liability===
N/A
===Umbrella===
N/A

==Conditions==
===Casualty===
- Minimum and Retained Premium = 10% (Excluding Fees)


- Cgl-0145 - Asbestos Exclusion

- Cgl-0218 - Terrorism Exclusion - Liability

- Cgl-0223 - Fungi and Fungal Derivatives Exclusion Endorsement


- Conditions Applicable to all Commercial General Liability Coverages

===Excess===
POLICY PREMIUM: 


- Minimum and Retained Premium = 25% (Excluding Fees)

- Adjustment Rate: Flat

- Premium: $ Minimum for Policy Term


SCHEDULE OF UNDERLYING INSURANCE:


- Policy No: C 

- Commercial General Liability including Non-Owned Automobile - SPF#6

- Policy Period:  to 

- Insurer: Temple Ins. Co. as represented by A.M. Fredericks Underwriting Management Ltd.  

                          
- Underlying Limits & Coverages:

$ 1,000,000  Each Occurrence

$ 1,000,000  Aggregate Products-Completed Operations

$ 1,000,000  Personal Injury

$ 1,000,000  Non-Owned Automobile 


                    
ENDORSEMENTS ATTACHED HERETO & FORMING PART OF THIS POLICY:

- None Applicable


Conditions applicable to all Excess Liability Terms, Conditions and Endorsements made part of and attached hereto

===Professional Liability===
N/A
===Umbrella===
N/A


[[Category:Guidelines]]