So, you have your machinery insured on your farm policy and you decide to earn a little extra revenue by going out and doing some custom work. Did you know that the farm policy is designed for farmers doing their own farm work and not for farmers doing farm work for others? This is referred to as custom work and you need to be careful here.
This is similar to your homeowner`s insurance policy that covers your house and personal possessions but it does not cover your house that is used as a commercial office or the business possessions. Also, a commercial policy does not cover your personal belongings. There are very clear lines drawn in regards to personal, farm and business. All risks are different and coverage does not automatically apply.
There are three main areas of coverage that need to be dealt with before you go ahead and do any Custom Work. They are Machinery, Machinery Loss of Use and Legal Liability.
Depending on what you are doing your existing farm policy may be altered to allow for you to do the custom work and be fully covered. However, you may have to change insurance company, for any number of different reasons, and worst case scenario would be that you may need to have an entirely separate commercial policy issued.
Be sure to seek advice and purchase insurance from those who understand your business!