Controlled 

Environment (CE)

Crop Insurance

An introduction to the design, concepts, 

and terminology of CE crop insurance

Last Updated: 10/13/2023
Agenda

1

o Background and Context: What is CE

o Challenges and Benefits

o Application Process

o Loss Adjustment Process

o How CE works

o The 2024 Pilot Area

o Examples
Background and 

Context: What is CE?

2
Background: 

A Farm Bill Requirement

The Agricultural Improvement Act 

of 2018 directed RMA to research 

the feasibility of a policy to insure a 

controlled environment such as a 

greenhouse: o The production of floriculture, 

nursery, and bedding plants;

o the establishment of cuttings or 

tissue culture in a growing 

medium; or

o other similar production, as 

determined by the Secretary.

3
Background: 

A Farm Bill Requirement

• RMA to study the effectiveness 

of policies based on the risk of: • plant diseases introduced 

from the environment;

• contaminated cuttings, 

seedlings, or tissue culture; 

or

• Federal or State destruction 

orders associated the 

contamination

4
An Overview of the CE Crop 

Insurance Program

A crop insurance plan designed to insure Controlled Environments.

• CE is designed to insure plant disease or contamination losses due to 

destruction orders:

• Federal or State destruction orders associated with plant disease or 

contamination.

• Losses are compensated based on the value of the infected plants.

• The CE pilot program will be available in selected states and counties

5
What is a 

Controlled 

Environment? 

o Fully-enclosed (Ventilation allowed)

o Permanent/Non-Seasonal Structure

o Elements needed to support plant 

growth are provided artificially

6
Challenges and Benefits 

of CE Crop Insurance 

7
Challenges of Insuring 

Controlled Environments o Insuring thousands of plants under one policy o Constantly fluctuating inventory o No established framework for what a “typical” 

operation would be, all greenhouses production 

systems are different: o Type of protection 

- Greenhouses, brick and 

mortar, fiberglass, etc.

o Time to market - Annuals vs Perennials, 

Lettuce vs Tomato

o Production Practices – Soil, hydroculture or 

other growing media

o Propagation- Grafting, seeding, cuttings, etc.

o Measurement- Plant count, square feet, 

pounds, historic production

8
Benefits of 

CE 

Insurance

o Simple application and policy renewal process

o Inventory is not required with application

o Producer-selected plant categories that are specific to CE

o Producer selects the amount of coverage

o Prices are determined based on producer's 

sales history

o Disease and contamination are the only 

insured cause of loss

o May insure same specific plant under CE and 

a Nursery Value Select (NVS) or Nursery 

(FG&C) policy

9
Application Process

10
Who is 

Eligible to 

Buy CE?

A producer is eligible for CE 

insurance if:

oAt least 40% of the dollar value of 

plant sales are into the wholesale 

market.

oWholesale clients include:

• Retailers who resell to end 

users

• Landscape contractors

• Government entities or 

organizations; and/or

• Commercial fruit and 

vegetable plants and plant 

products

11
Who is 

Eligible to 

Buy CE? 

(cont’d)

The production is eligible for CE 

insurance if:

oPlants or plant products such as 

tomatoes, etc. (specific plants) are 

grown using a plant production 

practice (e.g., soil, hydroculture, all other growing medium) identified 

in the policy and Special Provisions.

oSubsidy is available if the producer 

meets conservation compliance 

requirements (as verified by 

FSA/NRCS)

12
Application 

and 

Renewal 

Process

o All application documents are collected 

in the Controlled Environment Value 

Report (CEVR) at the time of 

submission and updated with renewal, 

if there are changes.

13
How To Apply?

For new insureds and first-year 

applicants

Complete and submit the following documents: o Application for crop insurance o CEVR for each basic unit o MUVP for each plant category o Recent catalog o Biosecurity self-certification o *Inspection required the first year. 

14
Application and Renewal Process 

(cont’d)

The CEVR includes:

o Monthly unit value plan (MUVP) 

oSelected Value (SV)

o Coverage percentage

o Most recent catalog

oBiosecurity self-certification

oSupporting documentation

15
How To Apply?

An example for 2024 Dec 1 Sales 

Closing Date (SCD):

oFirst year CE is offered SCD is 

December 1, 2023 – For all states and 

counties.

oInsurance coverage begins January 1, 

2024

oNext SCD is May 1 or September 1, 

depends on state and county

16

Sales Closing Date is the last day to enroll for a product for a 

given full insurance year. CE coverage has continuous 

enrollment, and all policies renew annually based on SCD
How To Apply?

For new insureds and first-year 

applicants-after the SCD

Applying after the SCD:

• Applications sent after the sales closing date:

• Attaches on 31st day (30-day waiting period) 

• Premium is owed from the first day of the month 

insurance attaches through the end of the 

insurance period

17
How To Apply?

An example for 2025 of applying for 

coverage after the SCD:

oFirst year application with May 1 

SCD 

oYou apply on July 1 (you miss the 

SCD)

oCoverage starts August 1 

oPremium owed from August 1 

through May 31

18
How To Apply?

For carryover insureds:

If CE has no changes, then submit:

• CEVR for each insured practice and basic unit

• Current catalog

• Biosecurity self-certification

• Failure to submit documents by the SCD by the 

can result in a lapse in coverage.

19
The Loss Adjustment 

Process

20
Loss 

Adjustment: 

Terminology

o Pre-loss actual unit value –Total dollar value of all 

specific plants in a basic unit, immediately prior loss 

event

o Determined by multiplying, in each basic unit, 

approved sales value by number of plants and 

summing the results.

o Post-loss damage value –Total dollar value of 

dead/ZMV plants in basic unit lost due to an insured 

cause of loss determined using FCIC approved 

procedures and the damage factors contained in 

the Special Provisions.

o Damage factor –0.00 for undamaged specific plants or 1.00 dead/ZMV (Zero Market Value) 

plants.

o Undamaged plant – A specific plant that is not a dead/ZMV plant and not required to be destroyed

o Dead/ZMV plant – A specific plant that, due to an 

insured cause of loss, must be destroyed pursuant to a 

destruction order.

21
Loss 

Adjustment

oPre-loss actual unit value prior 

to the insurable loss event 

oPost-loss damage value by 

specific plants that are:

oDead/ZMV - Damaged (or 

considered to be damaged) 

by disease or contamination 

and destroyed

oUndamaged and not 

destroyed

22
Loss Adjustment (cont’d)

oLoss determination:

oPercent of loss = (Post-loss damage value) / (Pre-loss actual unit 

value)

oIndemnity determination:

oPercent of loss x Coverage percentage x:

oLesser of (pre-loss actual unit value) or (SV – previous indemnities)

23
Loss Adjustment: Basic Process

When you have a loss, notify agent as directed in the Common Crop 

Insurance Policy Basic Provisions.

The Loss Adjuster will:

oExamine the plants in the basic unit from which the reported loss 

occurred.

o Assign a damage category to the plants:

o Undamaged or Dead/ZMV

24
Loss Adjustment: Damage 

Factors

25

Undamaged

(Adjuster Determined)

Dead/ZMV (Adjuster 

Determined)

Description

Not required to be 

destroyed per the 

Destruction Order

Required to be destroyed 

pursuant to the 

Destruction Order

Damage Factor 0% 100%

Prior to receiving an indemnity, the AIP must verify the insured destroyed or disposed of the 

dead / ZMV plants by a method approved by the AIP.
Determining the value of the loss

Pre Loss-Actual Unit Value:

o The loss adjuster determines the value of all plants in the basic unit 

that existed before the loss event occurred. 

Post Loss Damage Value:

o The loss adjustor determines the value of the Dead/ZMV plants in 

the basic unit. 

The Percent of Loss is: 

o Post-loss Damage Value / Pre-loss Actual Unit Value

26
How it works

27
How Does 

CE Work?

o The producer determined variables:

o Dollar Value of each basic unit by month for 

coverage year

o Dollar Value the producer elects to insure for 

the basic unit – Selected Value (SV)

o Coverage Percentage

o Value determination process

o Use producer records to establish both pre 

and post loss values

o Producers can adapt and change inventory during 

the year

28
How Does CE Work? (cont.)

The amount of insurance for a basic unit is:

o Designated by the producer 

o Limited by the highest declared monthly inventory value for that basic unit

o CAT coverage establishes a unit that contains all plant categories in the practice. 

o Value for loss is (in order of precedence) based on availability:

o Sales receipts 

o Previous 60 days, then

o Previous 12 months, then, if no sales receipts, 

o Contract prices for future delivery*, or

o Patent designated price, then

o Catalog price, less the greatest discount offered to any customer

29
How Does CE Work?(cont.)

o Three practices:

o Soil

o Hydroculture

o All other growing media 

o Ten plant categories:

o Premium rates by category

o Descriptions are intended to be broad

o Genera typical to each plant category are available from agent, Special Provisions, and CE 

Insurance Standards Handbook (ISH)

o Some Genera may be included in multiple plant categories, for example potatoes can be 

for food or seed. 

30
CE Plant Categories o Cut Flowers and Greenery o Vegetable and Food Crops o Food and Flower Seed Plants o Annual Bedding and Garden Plants o Perennial Bedding and Garden Plants o Bulbs, Rhizomes, Corms, and Tubers o Foliage and Tropical Plants o Trees and Shrubs Seedlings and Grafts o Propagative Horticultural Materials o Cuttings and Tissue Cultured Plantlets o All other plant groupings included in 

actuarial documents

31
What Risks Does CE 

Cover?

o Insures plants affected by plant disease or contamination that have 

been destroyed under a destruction 

order (value of the destroyed plants).

o To be an insurable loss, the plant 

disease or contamination must have 

been unknowingly introduced into 

the CE operation at no fault of the 

operation resulting in a destruction 

order that requires destruction of the 

plants.

o Grower must have appropriately 

executed the self-certified biosecurity plan.

32

This Photo by Unknown Author is licensed under CC BY-SA
What Risks Does CE 

Cover? (cont’d)

o Destruction Order must be in place and turned in for 

loss adjustment.

o Destruction Order includes:

o Name of disease or cause of contamination

o Action to be taken

o How to destroy plants

o Date and deadlines for destruction

o Name of plants

o They are considered Dead/ZMV plants.

o “Buffer plants” that are ordered to be destroyed are 

considered to be damaged due to an insurable cause.

33

This Photo by Unknown Author is licensed under CC BY
What Risks Does CE 

Cover? (cont’d) o Coverage is only for plant disease or 

contamination that results in a destruction 

order

o Coverage is NOT provided for: o Inability to market the specific plants 

due solely to refusal of a buyer to accept 

production; boycott; or a quarantine

o Failure of the plants to grow to an 

expected size

o Failure to follow good production 

practices

o Failure of irrigation water supply o Lack of electricity o Destruction of CE structure

34
How are Basic Units and Fees 

Designated? 

35

CAT Buy-Up

Units

Basic unit for each plant production 

practice;

No other units allowed

Basic unit by plant production practice and 

plant category

Fees Admin fee per basic unit is $655 Admin fee per each plant category within 

each basic unit is $30

Example Soil practice

at CAT

Hydroculture practice six plant categories at 

Buy-Up

Fees by Practice Pays $655 per CAT policy

$655 x 1 basic unit = $655

Pays $30 for basic Unit

$30 x 6 basic units = $180
CE Units: Explained

36

CAT (Catastrophic 

Coverage) is Basic units 

by practice

For CAT, no further unit 

division allowed

For buy-up coverage, 

(anything other than 

CAT), basic units are by 

plant production 

practice and plant 

category
What 

coverage 

percentages 

are 

available?

o Available Producer Selected 

Coverage Percentages:

o CAT

o50% - 75% in 5% intervals

oFor Additional Coverage policies

oSeparate coverage 

percentages may be chosen 

by basic unit (which is by 

plant practice and plant 

category).

37
Coverage is based on the Nursery Value 

Select (NVS) insurance program:

o The producer identifies the expected value of the plants they expect to have in their operation 

for each month of the covered year.

o No requirement to provide estimate of plants by name and size – simply the expected value of 

the plants in the CE. 

o Insurance uses the CE’s information from inventories and verifiable sales records to establish 

pre-loss and post-loss values.

o The producer selects the CE value they desire to insure.

o Cannot exceed the maximum monthly value they declare for the plant production practice and 

plant category in the basic unit for the covered year.

o The amount of insurance is calculated as: 

o (producer’s selected value) x (the producer’s elected coverage percentage) x (the price 

election percentage) x (the producer’s share)

38
How is the Premium 

Determined?

o Total premium for a basic unit is the sum of:

o The SV(s) you declared on your CEVR for the basic unit, times

o The appropriate coverage percentage for the basic unit, times

o The appropriate premium rate for the plant practice/plant 

category, times

o Your share

o Your premium is the total premium minus the amount of subsidy 

that applies to each basic unit.

39
What is a 

CEVR? 

o CEVR is a document in which the producer declare:

o The monthly value of the plants you expect to have in 

each insured basic unit (MUVP)

o The value you elect to insure (the SV) for each insured 

basic unit (which may not be greater than the greatest 

value you declare for any month in the MUVP for that 

basic unit)

o The coverage percentage you elect for each basic unit

o CEVR also includes

o Two printed or one electronic copy of all catalogs or 

price lists you will use during the insurance year 

o Biosecurity self-certification document

o Required for each basic unit

o Displays the Amount of Insurance for the policy

o SV x Coverage Percentage x Price Level (1.0 for buy-up 

and 0.55 for CAT) x Share 

40
Basic Unit

Plant 

Category 

Name

June July August September October November

0001

Propagative 

Horticultural 

Materials

$500,000 $750,000 $1,200,000 $300,000 $150,000 $200,000

41

All Other Growing Media (Amount of Insurance and Total Premium):

Monthly Unit Value Plan 

Example Form

MUVP 

(Continued) December January February March April May SelectedValue

Propagative 

Horticultural 

Materials

$250,000 $500,000 $750,000 $900,000 $1,000,000 $800,000 $900,000
Basic Unit 

No.

Plant 

Category

Selected

Value

Coverage 

Percentage

Price Level

(Additional

Level of 

Coverage -

1.0; CAT –

0.55)

Insured 

Share

Amount of 

Insurance

0001

Propagative 

Horticultural 

Materials

$900,000 0.75 1.0 1.0000 $675,000

42

All Other Growing Media (Amount of Insurance and Total Premium):

How is the premium determined?

Basic Unit 

No.

Plant 

Category

Amount of 

Insurance Plant Category Rate Total Premium

0001

Propagative 

Horticultural 

Materials

$675,000 .0107 $7,223
Basic 

Unit No.

Plant 

Category

Coverage 

Percentage

Total 

Premium

Subsidy 

Factor Subsidy

Producer 

Paid 

Premium

0001

Propagative 

Horticultural 

Materials

0.75 $7,223 0.650 $4,696 $2,527

43

Example (Producer Paid Premium):

How is the premium determined?
2024 Pilot Area

44
Where is CE 

Offered? o For 2024 CY the sales closing date is December 1, 

2023.

o The premium will be pro-rated the initial crop year.

o For 2025 and succeeding crop years, sales closing 

dates are May 1 or September 1, depending on 

your state.

o May 1: Alabama, Delaware, Florida, Maine, 

Maryland, New Jersey, New York, North Carolina, 

Pennsylvania, Texas, Virginia, and West Virginia.

o September 1: California, Colorado, Hawaii, Iowa, 

Kentucky, Michigan, Minnesota, Ohio, Oregon, 

Tennessee, Utah, Washington, and Wisconsin

o Sales closing dates for specific counties are 

identified in the actuarial documents.

45

This Photo by Unknown Author is licensed under CC BY-SA
CE Pilot Counties Map

46
CE Pilot List of 

States and Counties

47

2024 Crop Year

Alabama Florida Florida (cont) Florida (cont) Iowa Michigan (cont)

Autauga Alachua Highlands Palm Beach Cerro Gordo Kent

Baldwin Broward Hillsborough Pasco Howard Macomb

Mobile Calhoun Jefferson Polk Kentucky Monroe

California Charlotte Lafayette Santa Rosa Madison Muskegon

San Bernardino Citrus Lake Sarasota Pulaski Ottawa

Santa Barbara Collier Lee Seminole Rowan Washtenaw

Colorado Columbia Leon St Lucie Maryland Wayne

Adams De Soto Levy Sumter Cecil Minnesota

Arapahoe Escambia Manatee Suwannee Michigan Dakota

Douglas Flagler Marion Volusia Allegan Hennepin

Larimer Gadsden Martin Hawaii Berrien Ramsey

Weld Glades Miami - Dade Hawaii Branch Steele

Delaware Hardee Okeechobee Maine Genesee Washington

New Castle Hendry Orange Somerset Kalamazoo
CE Pilot List of 

States and Counties (cont)

48

2024 Crop Year

New Jersey Ohio (cont) Pennsylvania Texas (cont) Washington (cont)

Atlantic Lake Berks Henderson Grant

Cape May Lorain Chester Jeff Davis Yakima

Cumberland Lucas Lancaster Presidio West Virginia

Gloucester Oregon Tennessee Smith Mercer

New York Clackamas Cannon Van Zandt Upshur

Erie Linn Coffee Waller Wisconsin

Suffolk Marion De Kalb Ward Kenosha

North Carolina Multnomah Franklin Wharton Washington

Buncombe Polk Grundy Wood

Ohio Washington Warren Utah

Cuyahoga Yamhill Texas Juab

Erie Virginia Brazoria Washington

Franklin Fauquier Fannin Benton

Fulton Rockingham Harris Franklin
CE Program 

Dates 2024

49

2024 Crop Year

Counties in AL, DE, 

FL, ME, MD, NC, 

NJ, NY, PA, TX, VA, 

and WV

Counties in CA, 

CO, HA, IA, KY, MI, 

MN, OH, OR, TN, 

UT, WA, and WI

Sales Closing Date 12/1/2023 12/1/2023

Premium Billing Date 3/1/2024 7/15/2024

End Of Insurance Date 5/31/2024 9/30/2024

Termination Date 5/31/2024 9/30/2024

Contract Change Date 1/31/2024 4/30/2024
CE Program 

Dates 

2025 + 

50

2025 and Succeeding Crop Years

Counties with 

May 1 SCD

Counties with 

September 1 SCD

Sales Closing 

Date 5/1/202y 9/1/202y

Cancellation 

Date 5/31/202y 9/30/202y

Premium Billing 

Date 3/1/202y+1 7/15/202y+1

End Of Insurance 

Date 5/31/202y+1 9/30/202y+1

Termination Date 5/31/202y+1 9/30/202y+1

Contract Change 

Date 1/31/202y+1 4/30/202y+1
Let’s look at some 

examples...

51
Example 1: Same Pre-Loss Value

52

Basic 

Unit

Plant 

Category 

Name

Coverage 

Percentage

Selected

Value

Amount of 

Insurance

Pre-Loss Actual 

Unit Value

Post-Loss

Damage Value

SV x 

Coverage 

Percentage

0001

Propagative 

Horticultural 

Materials

0.75 $900,000 $675,000 $900,000 $900,000

Total Wipe 

Out!
Example 1: Same Pre-Loss Value 

(cont’d)

53

Percent of 

Loss

Percent of 

Loss x 

Coverage 

Percentage

Share Amount of Loss

Price 

Election 

%

Indemnity

Post-Loss

/ Pre-Loss

Percent of Loss x 

Coverage Percentage % 

x min(SV, Pre-loss Actual 

Unit Value

Amount of Loss x Price 

Election Percentage 

(1.0) x Share (1.0)

1.0 0.75 1.0 $675,000 1.0 $675,000

Total 

Wipe 

Out!
Example 2: High Pre-Loss Value

54

Basic Unit

Plant 

Category 

Name

Coverage 

Percentage

Selected

Value

Amount of 

Insurance

Pre-Loss Actual 

Unit Value

Post-Loss

Damage Value

SV x 

Coverage 

Percentage

0001

Propagative 

Horticultural 

Materials

0.75 $900,000 $675,000 $1,200,000 $1,000,000

Severe 

Loss 

Event
Example 2: Multi-Category, Multi-Coverage 

Percentage – High Pre-Loss Value (cont’d)

55

Percent 

of Loss

Percent of 

Loss x 

Coverage 

Percentage

Share Amount of Loss Price 

Election % Indemnity

Post-Loss

/ Pre-Loss

Percent of Loss x 

Coverage Percentage x 

min(SV, Pre-loss Actual 

Unit Value

Amount of Loss x 

Price Election 

Percentage (1.0) x 

Share (1.0)

~0.83 0.625 1.0 $562,500 1.0 $562,500
Occurrence 

Loss 

Option

(OLO) 

Included

• CE Examples for Occurrence Loss 

Options shown on next slide. OLO is not 

an option in CE, it is automatically 

included in the calculations as shown:

56
57

Single Unit Example

NVS Policy and Loss Information CE

Coverage Percentage 75%

Pre-loss actual unit value $600,000

Post-loss damage value $300,000

Percent loss 0.50

Selected Value $500,000

Determine the Amount of Loss:

Lesser of: Pre-loss actual unit value or (SVprevious indemnity) $500,000 $500,000

Percent of loss 0.50 Percent of Loss 0.50

Coverage % 0.75

Percent of Loss x Coverage % = 0.375

Amount of Loss $250,000 $187,500

Occurrence Deductible

(1- Coverage Percentage) 25%

Lesser of: Pre-loss actual unit value or (SVprevious indemnity) $500,000

Occurrence Deductible $125,000

Indemnity before Deductible $250,000

Indemnity after Deductible – NVS $125,000 Indemnity for CE $187,500
CE –

Additional 

Resources

o CE program materials are available on the RMA 

website.

o www.rma.usda.gov

o For the initial year, the CE rates and Special 

Provisions will be available through the Actuarial 

Information Browser no later than 60 days prior 

to the Sales Closing Date for each state/county. 

For subsequent crop years, rates and Special 

Provisions will be available by the contract 

change date – January 31 or April 30, as 

applicable.

58
To Conclude

This presentation provides an overview of 

the new Controlled Environment Pilot 

Crop Insurance Program that will run 

alongside the current nursery programs.

59
Risk Management Agency, USDA

Nursery Team

rma.kc.nursery@usda.gov

Watts and Associates

Alex Offerdahl

4331 Hillcrest Rd

Billings, MT 59101

406-252-7776

aofferdahl@wattsandassociates.com

60

Contact 

us: