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Urban, Indoor, and Vertical Farm Insurance: Costs, Coverages, and Considerations | Fullsteam

5 min read
December 12, 2022
Urban, Indoor, and Vertical Farm Insurance: Costs, Coverages, and Considerations | Fullsteam

A wide variety of subindustries supply the U.S. food industry, and many of them involve farming and agriculture. Those with expertise and experience in these areas have perfected the art and craft of successful, quality food production.

There are newer ways that farming has taken off as well, including urban and vertical farming that allow for crops and plants to be grown in city settings and in smaller spaces. For those who are navigating this relatively new agricultural subindustry, one of the most important considerations for running a successful business is obtaining urban and vertical farm insurance.

The Importance of Vertical Farm Insurance

The relatively new industry of condensed urban agriculture has grown exponentially in recent years, creating an ever-increasing need for insurance coverage to help these small businesses succeed. Because this industry relies in part on the right weather, the unexpected changes that climates experience can create uncertainty for urban farmers. As a result, vertical farm insurance is needed to address issues with crops and produce that may cause these businesses sudden and severe financial issues if the wrong weather rolls in.

Furthermore, because these farms often require the use of heavy-duty equipment such as scissor lifts and forklifts, equipment insurance and liability insurance are also important aspects of the coverage needed. Add on to these things the typical insurance coverage that most businesses already require and you've got a significant need for sufficient and tailored insurance coverage.

Coverage Considerations

There are several different kinds of insurance required for this kind of business to thrive with peace of mind. Policies covering the following risks combine to make up the robust coverage that is ideal for any urban or vertical farm.

Property Insurance

Property insurance is key for urban and vertical farms because of the structures that they require to grow their crops. This kind of policy can cover the buildings and structures involved in the business as well as the equipment (especially heavy-duty equipment) involved in the business. This is especially important for these small-scale farms because they usually utilize forklifts and similar machines to reach the highest levels of their crops.

Crop Insurance

This is one of the most unique aspects of indoor farming insurance, though it's also part of the insurance that larger-scale farms typically obtain. Coverage for your crops helps to ensure that financial losses can be minimized in the event of natural disasters or other occurrences that significantly affect your crop yield or the quality of your crops.

For example, something as simple as an unexpected issue with your facility's air conditioning can quickly deteriorate your crop, ultimately costing you both the HVAC repair and the crop replacement. Because the crops are literally the main product and focus of your farm, you should bring up this point with any insurance agent you speak to so that everyone is on the same page about the coverage.

Liability Insurance

Liability insurance is a more typical kind of insurance coverage that is also important for farms of any size. To protect against damages and potential lawsuits in unfortunate circumstances such as the injury of a customer, liability coverage is necessary for peace of mind.

Other Insurance

There are also other kinds of insurance important for piecing together a more complete urban farm insurance plan, such as workers' compensation insurance. Workers' comp insurance will protect an urban farm from unexpected costs associated with unfortunate injuries on the job, which are always possible when using heavy machinery. Furthermore, good business practices in general call for an umbrella policy that can round out your coverage.

Cost Considerations

Urban and vertical farm insurance costs can vary greatly depending upon several things. Some of the most consequential factors that an insurer will take into consideration are the following:

  • Location (region, state, city)
  • Number of buildings involved
  • Amount of equipment involved  
  • Size of the business (number of personnel)
  • Any unique or special situations that apply

Indoor agriculture comes in many different sizes and forms, so it's best to compare several quotes for vertical farm insurance quotes. Your specific business is unique, and a good agent will work with you to tailor your coverage as much as possible to its needs.

Other Considerations

There are other things to consider when you're getting your indoor farm paperwork and procedures set up. While insurance is important, make sure you're organized in the other aspects of your business to help minimize your need to use your coverage.

Refine Your Overall Business Plan

Vertical farm insurance is only one facet of a well-run indoor ag business. Meeting with a good business consultant can be extremely helpful for getting things in order and making a plan for scalable growth. Furthermore, meeting with an accountant may help you to prepare financially for the first few years of running your business, which can be especially difficult.

Learn the Agricultural Industry Well

While there are plenty of urban farming business owners who have been in farming for years or decades, plenty of the new startups in this field are run by entrepreneurs, nonprofit leaders, and other professionals who are new to the agriculture industry. It's especially vital for these individuals to apply themselves to really understanding and learning this area of industry.

While it may seem like farming in its various forms has always been basically the same, agriculture technology and methods are always evolving and being developed. Even for seasoned farmers, it's important to stay up to date on best practices and ways to improve, and that includes being aware of what kinds of urban farm insurance might become necessary over time.

Get the Help You Need to Find the Right Vertical Farm Insurance

Starting any business is a huge undertaking, and urban and vertical farming carry with them unique responsibilities and considerations. If you're in the early stages of starting your own urban farm, contact Fullsteam Insurance to find out how our knowledgeable team can guide you through the process of getting the right vertical farm insurance in place for your business.

Tyler Crawford
by Tyler Crawford
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