“Over the last 20 years we have seen a number of significant losses on younger, more vulnerable, trees caused by hail, windstorm, fire and frost.  More recently we have seen an increase in “severe” storm activity that generates large hail stones and tornado like winds.  We’ve seen first hand these events cause significant damage to mature trees and infrastructure which can be devastating for un-insured growers,” he said.

The dilemma is that the likelihood of these events is relatively low but the impact can be devastatingly high.

“Likelihood will largely depend on the orchard location, layout and management, age of the trees, surrounding land use and any risk mitigation initiatives.  Whilst the likelihood of a significant loss event may be low, they are referred to as “catastrophe” losses due to potential impact on the long term viability of the farm business,” Mr van der Vegt said.

Tree insurance is certainly an option growers should at least investigate and consider.  A number of insurers will provide cover on most tree types and the cover is competitively priced which simply reflects the relatively low risk of such events.  These insurance products generally cover cleaning up and re-establishing the orchard and associated infrastructure following a loss, however most won’t cover the real financial impact in terms of the future loss of crop production.

Once trees are productive, the risk management focus generally shifts from the trees to the crop itself which generates the annual income.  Clearly the crop is far more vulnerable to the weather related perils than the trees.  Securing adequate insurance cover can be complex as the available insurers will provide cover on different crop types in different areas and for different perils.  This is why it’s a good idea to use a broker like AgriRisk who can work with you to determine your needs and shop around for the appropriate products.

“While the insurance market for tree crop production can be difficult and complex, it’s a good idea to understand the options so they can make an informed decision on their risk management strategy.  Growers should keep revisiting their options because the insurance market is dynamic, with insurers entering and leaving the market and new products introduced relatively regularly,” Mr van der Vegt said.