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Risk Management Tools: Insurance

Risk Management Tools: Insurance. Unit 4: Agribusiness Management Lesson : AM11. Objectives. Lesson Objective:

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Risk Management Tools: Insurance

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  1. Risk Management Tools: Insurance Unit 4: Agribusiness Management Lesson: AM11

  2. Objectives Lesson Objective: • After completing the lesson on insurance, students will demonstrate their ability to apply the concept in real-world situations by obtaining a minimum score of 80% on an Insurance Blog. Enabling Objectives: • Define insurance, identify four common types of insurance, and explain three things to consider before purchasing insurance. • Define the importance of crop insurance to farmers. • Explore the legal liabilities of farmers and ranchers.

  3. Key Terms • Insurance • Negligence

  4. Insurance 101 • Choosing An Insurance Company • Smartly Saving Money on Homeowners Insurance • Be Smart and Get Renters Insurance • Smart Auto Insurance Tips

  5. Insurance • Protects one financially from unexpected economic loss • Lessens the hardship of unexpected economic loss • Meets obligation to others who are injured or suffer a loss due to one’s actions • Allows one to take financial risks for large purchases by functioning as collateral for a loan

  6. Types of Insurance Coverage

  7. Buying Insurance • Insure against losses that may lead to financial disaster • Insure irreplaceable and necessary property first • Do not insure anything that is easily affordable to replace • Insurance premiums on these items may be more expensive than the risk of loss or the actual value of the item • A bike • A beat-up car • Be sure coverage is adequate • Insurance purchased five years ago may not be adequate • Values of houses fluctuate • Some policies adjust for inflation • Buy insurance that provides coverage for situations where a loss is likely to occur • Take out flood insurance if your home is in a low-lying area near a river • Carry liability insurance if you own land or a business and hire workers • Consider all costs • Paying insurance premiums reduces amount of money individual or business has available for other purchases

  8. Insurance Investigation • Use Internet sources to investigate various types of insurance • Find answers to questions like: • How much insurance should I get? • What does a particular type of insurance cover? • What factors should I consider when purchasing insurance? • Why do I need a particular type of insurance?

  9. Crop Insurance • Protects farmers from natural disasters • Drought, severe storms, floods • Applications for crop insurance must be submitted by assigned deadlines • March 15th for corn and soybeans in Missouri

  10. Reporting Crop Damage • File claims within 72 hours of noticing damage • Contact crop insurance agent • Document losses, but do not destroy any crop until receiving direction from insurance company

  11. Legal Liabilities • Laws can affect farmer’s livelihood more than the average citizen • Damages have to be paid by negligent party • If farmer does not have sufficient money or liability insurance to cover damages, he may lose his farm • Liability insurance reduces risk • Substitutes small, regular payments for a large unexpected payment

  12. Negligence • Liability depends on negligence • Lapse of an individual to something a responsible person would do in the same situation

  13. Legal Liabilities and Land - People adjacent to land • Take reasonable care to prevent injury or property damage • Strong wind blows part of a building into neighbor’s crop land • Liable for damages to neighbor’s crop • Excavate near property line causing neighbor’s land to cave in • Liable for damages to neighbor’s land

  14. Legal Liabilities and Land - People on Land

  15. Liability of Employers - Employees • A person whose tasks the employer directs and controls • Greatest control over employee and greatest liability • Responsibilities to Employees • Provide safe place to work • Provide safe tools, machinery, and equipment • Warn and instruct of dangers they could not be expected to discover • Provide competent employees • Make reasonable conduct rules for all employees

  16. Liability of Employers - Agents • Person who transacts business or manages employer’s affairs • Hired farm manager • Responsible for agent’s acts while doing employer’s work

  17. Liability of Employers – Independent Contractors • Performing a job without control from employer • Custom harvester, crop duster, well drillers • Not responsible for negligent acts

  18. Conclusion • The insurance needs of individuals and businesses vary with each individual case. Insurance is designed to protect families and firms from jolting financial losses.

  19. Insurance Review • What is insurance? • What are the different types of insurance coverage? • What should be considered when buying insurance? • Why is crop insurance important to farmers? • What do farmers need to know about crop insurance? • What are the legal liabilities associated with farming and ranching? • What is negligence? • What are the legal responsibilities of land owners towards people on adjacent lands and people on the land? • What are the liabilities of employers?

  20. Exit Card • What did you learn today about insurance? • What questions do you still have about insurance?

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