|
|
Shifting Bull
Coverage
Be sure you know how
materials and policies protect you if a bull goes bad or simply
goes down.
By Wes Ishmael |
Run enough bulls long enough and
it’s not a matter of whether one will become unusable; it’s a
matter of when and how many.
There are just too many moving parts for it to be otherwise: the
vagaries of Mother Nature, disease, intrinsic bull behavior,
vast geography, rotten luck.
Easily 80 percent of the problems occur with the first turn-out,
based on our data at least,” says John Burbank, Chief Executive
Officer of Seedstock Plus. The organization is a cooperative of
independent seedstock producers. Bulls are selected from member
herds, then developed and acclimated regionally. Seedstock Plus
markets approximately 1,000 bulls each year, as well as females.
That’s why typical breeding guarantees get at the bull’s ability
to breed when purchased or by the time it achieves a specific
age. You can find plenty of variety, though. Always look at the
terms and conditions listed in a sale catalogue for the
specifics. In private treaty situations, always be sure to ask
about them.
The likelihood that any problems will come in the first breeding
season is also why bull buyers inclined toward broader coverage
used to be more interested in loss-of-use insurance than
mortality policies, explains Jim Gies of Eaton, CO. Besides
running his own cattle operation, Gies is a long-time field
representative for Western Livestock Journal. He’s also been a
livestock insurance agent for American Live Stock Insurance (ALSI—Harding
and Harding until a year ago) for 10 years.
Plenty of folks would still like to insure against loss of use.
Unfortunately, ALSI and other livestock insurance agencies did
away with such policies several years ago. In their place, some
full service seedstock suppliers have expanded the protection
they provide.
At Seedstock Plus, for instance, buyers can choose to pay 4% of
the bull’s purchase price at the time of sale for what amounts
to a no-fault insurance policy. “If a buyer has a problem with a
bull any time during the first breeding season, we just take
care of it,” says Burbank.
More specifically, from busted shoulders and penises, to a
lightening strike, to slipping through a makeshift fence to
become the hood ornament on a train engine, the buyer is covered
by Seedstock Plus’ no-fault insurance. Bulls are quickly
replaced with another one of comparable quality, or at the
buyer’s discretion, they receive credit toward purchase of
another bull at a future sale.
“We still guarantee all of our bulls for the things we believe
breeders should be catching on the front side—fertility,
disposition and feet and legs—whether or not buyers purchase the
insurance,” explains Burbank. “But, we felt like it was
important to provide buyers with an opportunity to obtain
insurance against the loss of use for the first breeding season.
We felt like it was essential to provide it at an affordable
price and in a straight-forward manner with no fine print.”
About half of the buyers opt for the insurance, says Burbank.
“I encourage buyers to take it because I believe it’s a sound
business deal,” says Burbank. “If I spend $3,000 for a bull,
that’s a sizeable investment. If you get half-way through the
breeding season and something happens to him unrelated to his
ability to breed cows—those things covered by the breeding
guarantee—the insurance means you’re assured of a quick
replacement of comparable quality.”
Seedstock Plus also helps customers declining the coverage to
find replacements, but the company has more options with
customers who have paid for the added cost associated with
replacement.
“At 4 percent, the organization is subsidizing the program, but
at that rate replacing bulls is economically feasible for us and
our customers,” says Burbank. Plus, he explains sharing the cost
of the insurance program tends to encourage closer bull
management.
When customers weren’t paying for the coverage—Seedstock Plus
used to offer it free—Burbank says it was too easy for some to
let the basics slide. For instance, leaving too many bulls in
the same pasture at the end of breeding season, which is an
invitation to bull injury.
Look around the industry and you can find a variety of coverage
options that some seedstock suppliers offer beyond the basic
breeding guarantee. There’s no-fault coverage like that provided
by Seedstock Plus. There’s coverage that applies to specific
injuries or events. You can find coverage that comes with no
fine print, or lots of it.
Similarly, seedstock suppliers provide added coverage in a
variety of ways. Some cost-share, some provide coverage but
don’t subsidize it, some provide it fully. Some limit such
coverage to specific animals. You get the idea.
That’s why Gies cautions bull buyers to ask enough questions to
know exactly what protection they’re getting with the bulls they
purchase. That means understanding the breeding guarantee, as
well as any warranty and insurance programs unique to the
seedstock supplier.
Equal Need and Opportunity
Though you’d be hard-pressed to find any commercial policies
available today for loss of use, Gies points out some mortality
policies like those offered by ALSI come with limited-risk
provisions that cover such things as accidental shooting, fires
and such.
For perspective, an ALSI mortality policy costs 6% of the bull’s
purchase price for 12 months of coverage; 4% for six months. In
some cases Gies says the seller will provide the buyer with the
policy, or share the cost.
Even when it comes to mortality insurance, Gies says commercial
producers are as likely as seedstock producers to purchase
coverage. In both cases, he notes it can be a personal risk
management decision or one required by a lender, whether or not
the bull comes with a breeding guarantee.
If the seller wants added protection—whether offered by
commercial agents or seedstock suppliers—Gies suggests bull
buyers dig deep enough to understand not only what protection
their money is buying, but how any claims will be handled.
“You want a company that settles claims quickly and fairly,”
says Gies. Ask around just a little and you can find folks who
thought they were buying coverage for something that wasn’t
covered when a problem arose. You’ll also find some who had
legitimate claims, but felt like the defendant rather than the
victim by the time an unscrupulous insurance company got done
raking them over the coals.
As with buying the bull himself, Gies say obtaining protection
boils down to familiarity and trust as much as anything. Chances
are you don’t buy bulls from programs you know nothing about.
Likewise, he recommends knowing something about the outfit
you’re considering for insurance. What’s their reputation and
history? Are the people selling it part of the cattle business?
Does anyone you know have experience with them? That kind of
thing.
“You feel most comfortable dealing with people whom you know
understand your business, as well as the products they’re
offering you to help with that business,” says Gies.
|
|
|
|
