1. Forms
2. FP
3. FP-04-08

What the form is

FP 04 08, Farm Computer Coverage, is an endorsement designed to be added to an ISO (Insurance Services Office) farm insurance policy. Its primary purpose is to provide specific insurance coverage for computer equipment, software, and data that are essential to modern farming operations. As agriculture becomes increasingly reliant on technology, this form addresses the unique risks and values associated with farm-related computer systems.

Classes of business it applies to

This endorsement is relevant for a wide range of agricultural businesses that utilize computers and related technology. Examples include:

• Crop Farms: Operations using computers for field mapping, GPS-guided planting and harvesting, irrigation control, and farm management software.
• Livestock Operations: Farms employing computerized feeding systems, climate control in barns, breeding record management, and animal identification systems.
• Dairy Farms: Those using robotic milking systems, herd management software, and computerized record-keeping.
• Agribusinesses: Any farm, ranch, or agricultural enterprise that relies on computers for accounting, inventory management, communication, or other operational tasks. For instance, a farm that uses specialized software to track market prices and manage sales would benefit from this coverage.

Special considerations

• Attachment to Base Policy: This endorsement is not a standalone policy. It must be attached to a base farm property coverage form, such as the FP 00 12 Farm Property–Farm Dwellings, Appurtenant Structures and Household Personal Property Coverage Form.
• Coverage Scope: It's crucial to understand what is specifically covered under "computer equipment." This typically includes hardware (computers, monitors, printers), and may extend to permanently installed software and data restoration, subject to the policy limits and terms. Coverage for media (like disks or tapes) might also be included.
• Limits and Deductibles: The endorsement will have its own limit of insurance, which should be adequate to cover the replacement or repair costs of the insured computer systems. A separate deductible may also apply to losses covered under this endorsement.
• Perils Covered: The endorsement will specify the perils for which coverage is provided. This might be on a named perils or special perils basis, depending on the specific version of the form and insurer practices.
• Exclusions: Standard farm policy exclusions may still apply, and the endorsement itself might contain specific exclusions related to computer usage, such as losses due to electrical disturbances (unless specifically covered), or wear and tear.

Key information for agents and underwriters

• Agents:
  • Conduct a thorough assessment of the client's farm operations to identify all computer equipment and software used. This includes not just desktop computers but also laptops, tablets used in the field, and any computerized control systems for farm machinery or facilities.
  • Discuss the potential financial impact of a loss to these systems, including replacement of hardware, reinstallation of software, and data recovery costs.
  • Explain the difference between coverage provided by this endorsement versus any limited coverage for business property or personal property that might exist in the base farm policy.
  • Ensure the coverage limit selected is appropriate for the value of the insured computer systems.
• Underwriters:
  • Evaluate the type, age, and value of the computer equipment to be insured. Specialized agricultural computer systems may have higher values and different risk profiles than standard office computers.
  • Consider the environment where the computers are located. Equipment in barns or outbuildings may be exposed to greater risks (dust, moisture, temperature fluctuations, rodents) than equipment in a climate-controlled office.
  • Assess security measures in place to protect computer equipment from theft or damage.
  • Clarify whether the coverage extends to portable computer equipment and its use off-premises.
  • Be aware that this endorsement typically covers physical loss or damage to the computer equipment itself. It is generally not a substitute for cyber liability insurance, which covers risks like data breaches, network security failures, and liability arising from online activities.