South Dakota Blizzard Teaches Painful Lesson About the Need for Livestock Insurance

Category: Business Insurance

An unexpected early blizzard caught South Dakota ranchers off guard last week, dumping nearly four feet of snow in some areas and killing tens of thousands of cattle. The storm swept through—preceded by rain, wind and mud—as herds were out to pasture, as is common this time of year. Entire herds were killed or displaced; animals were found buried in snow banks along a 100-mile path of destruction. Those that didn’t die from hypothermia or smothering as they huddled together to escape the snow and cold, wandered or were blown far away from home and remain lost or unaccounted for.

Unexpected, devastating situations like this are precisely why most business owners invest in insurance to protect their livelihood. But often farmers and ranchers forego insurance for their animals to avoid the expense, confident in their belief that losing a few animals every year doesn’t justify the cost of insurance protection. The South Dakota storm proves the opposite to be true: you can lose your entire herd—your entire livelihood—in one storm. Farmers and ranchers need some form of livestock insurance to protect their operation from the devastating consequences of all kinds of potential disasters.

Livestock Insurance Basics

Livestock insurance allows those who rely on animals to earn a living to recoup their losses in the face of a variety of disasters. Livestock insurance varies greatly among insurance companies. You can choose from a broader policy that covers specified perils and excludes others. Or, other livestock owners might want full-mortality coverage for high-value animals, such as racehorses, registered livestock or show animals. Full mortality policies will pay upon the death of the insured animal due to any legitimate cause, including illness, not just specific named perils. The cost of a full mortality policy will be directly related to the value of the animal being insured.

Standard livestock insurance will typically cover the following named perils, unless specifically excluded. But remember, coverage will vary by company and it is important to know what is and isn’t covered so you can add endorsements and adjust your coverage accordingly.

  • Smothering caused directly by a blizzard or snowstorm
  • Smoke, fire, lightning, windstorm, flood or hail
  • Electrocution
  • Drowning
  • Attack by dogs or wild animals
  • Accidental shooting
  • Collision with vehicles or falling objects
  • Vandalism
  • Collapse of a structure, including buildings, culverts or bridges
  • Sinkhole collapse
  • Riot or civil commotion

Theft of livestock can usually be covered under a specific endorsement. In addition, a hypothermia endorsement can be added that will extend coverage to animals that die due to hypothermia, but this will often not be available for pasture cattle.

The losses in South Dakota are devastating to the individual ranchers and the beef industry in the state as a whole. But lessons can be learned. Could you sustain a loss this devastating and still recover? Many South Dakota ranchers lost entire herds—and with them their livelihoods. The cost of livestock insurance might just be worth protecting yourself from a similar fate.

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