New agricultural property law highlights need to get insurance right

Amendments to development laws introduced earlier this month are set to incentivise more farmers to convert agricultural buildings into residential homes, but landowners are being advised to ensure the correct insurance cover is in place, or face the threat of policies not being relevant.

The new regulations and updates to the law came into force on 6 April, and include the intention to increase the numbers of properties that can be converted from existing agricultural farm buildings up to five. Existing development rights only permitted a maximum of three properties to be built without express planning permission.

With the increased development opportunities, it is anticipated more farmers will take advantage, and a rise in the number of conversions will follow. Before work starts or planning begins, farmers are being encouraged to ensure they are aware of insurance implications.

“If a property is insured as a farm building, as soon as any residential development work commences, the farm policy will no longer be relevant,” explains Nigel Wellings, director of agricultural insurance broker, Farmers & Mercantile (F&M).

Mr Wellings adds, “If you are using an outside contractor for the full conversion work, they must have Contractors’ All Risk (CAR) insurance, and this will cover all work in progress, materials, public and employee liability.

“Farmers also need to inform their own insurers of all work in progress, and the insurer should then cover the existing shell, providing they are fully aware of the plans.”

To ensure HSE obligations are met, the Construction (Design & Management), or CDM regulations, must be signed over to the contractor. The CDM regulations are the main set of regulations for managing health, safety and welfare of construction projects. Once signed over to the contractor, the owner will no longer be responsible for the work.

“If you are acting for yourself as the overseer of the build, employing separate bricklayers, plasterers, roofers etc., you will personally require Contractors’ All Risk insurance,” continues Mr Wellings.

“It is vital to notify insurers of development plans and progress. If not, your normal farm insurance will not cover you. My advice is always to discuss with your broker to avoid any shortfalls or grey areas.”


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About The Author

John Swire - Editor of Agronomist and Arable Farmer as well as responsibility for the Agronomist and Arable Farmer and Farm Business websites. After 17 years milking cows on the family farm John started writing about agriculture in 1998 and has since written for a variety of publications and has developed a wide circle of contacts within the industry. When not working John is a season ticket holder at Stoke City and also of late has become a fitness freak, listing cycling, swimming and walking as his exercises of choice.