Summary: In the current farm program of Insurance Services Office, coverage for livestock may be written under the Livestock Coverage Form, FP 00 40 02 09. It provides for either blanket or scheduled coverage on insured animals. Like other forms, the livestock coverage form may be used to form a monoline policy (with common policy conditions and declarations) or it may be combined with other forms of the farm program in a multi-line policy. It may not be used if coverage for livestock is provided through coverage form FP 00 13 09 03, farm property—farm personal property coverage form. Following is a discussion of the current livestock coverage form. Differences from the prior edition are noted.

Topics covered: Introduction

Coverage

Additional coverages

Coverage extensions

Exclusions

Limits of insurance and deductible

Farm inland marine conditions

General conditions

Definitions

Introduction

The livestock coverage form is a named perils contract used to insure livestock as the term is defined on the form; that is, cattle, sheep, swine, goats, horses, mules, and donkeys. Owners of farm animals are the principal prospects for this coverage, but there is no requirement that insured animals be owned exclusively, or even primarily, in connection with farms or farming.

Coverage may be written on a blanket basis, subject to a limit of insurance per animal and an aggregate limit per class, or on a scheduled basis, with a limit of insurance per class or type of animal. Each class may then be subdivided by type. A sublimit is also allowed for animals separately described in a schedule.

The commercial lines manual excludes eligibility for any of the following: Range animals of the beef type and range sheep while on ranges; Horses, mules or donkeys used or bred exclusively for racing, show or delivery; Livestock while being transported by common or contract carrier to or from or while at stockyards or commercial feedlots; Insureds conducting sales or auctions, covering livestock of others for public sales; Livestock insured under mortality policies covering, among other causes of loss, against death or destruction due to natural causes. This does not preclude binding a mortality risk pending a certification of a veterinarian, during which interim period the contract is limited to death of the animal due to fire and accident only; Livestock of circus, carnival or theatrical enterprises; Livestock on winter range; or Veterinarians and humane societies covering livestock of others in their care, custody or control for professional purposes.

Coverage

A.Coverage

We will pay for “loss” of or damage to Covered Property from any of the Covered Causes of Loss.

1.Covered Property, as used in this Coverage Form, means the following when a Limit of Insurance is shown in the Declarations:

a.”Livestock” of a class shown in the Declarations with a Limit of Insurance per animal; or

b.”Livestock” of a class shown in the Declarations with a Limit of Insurance per class with a sublimit allowed for individual animals separately.

But we do not cover “livestock” while in the custody of a common or contract carrier.

2.Property Not Covered

Covered Property does not include “livestock” while in:

a.Public stockyards, sales barns or sales yards; or

b.Packing plants or slaughterhouses.

3.Covered Causes of Loss

We will pay for direct “loss” caused by or resulting from, or made necessary by any of the following:

a.Fire or Lightning

b.Windstorm or Hail

This cause of loss does not include “loss”:

(1)Caused by or resulting from frost or cold weather;

(2)Caused by or resulting from ice (other than hail), snow or sleet, whether driven by wind or not;

(3)To “livestock” when caused  by running into streams, ponds or ditches, or against fences or other objects; or from smothering; or resulting directly or indirectly from fright; or

(4)To “livestock” when caused by freezing or smothering in blizzards or snowstorms.

c.Explosion

This cause of loss includes “loss” caused by or resulting from explosion of gases or fuel within the furnace of any fired vessel or within the flues or passages of such a vessel from which the gases of combustion pass.

This cause of loss excludes “loss” caused by or resulting from:

(1)Explosion of alcohol stills, steam boilers, steam pipes, steam engines or steam turbines owned or leased by you, or operated under your control;

(2) Electric arcing;

(3)Rupture or bursting of water pipes

(4)Rupture, bursting or operation of pressure relief devices; and

(5)Rupture or bursting due to expansion or swelling of the contents of any building or structure caused by or resulting from water.

d.Riot or Civil commotion, including

(1)Acts of striking employees while occupying the described premises; and

(2)Looting occurring at the time and place of a riot or civil commotion.

e.Aircraft

Aircraft, meaning only “loss” caused by or resulting from:

(1)Contact of an aircraft, spacecraft or self-propelled missile with Covered Property or with a building or structure containing Covered Property; or

(2)Objects falling from aircraft.

f.Smoke, causing sudden and accidental “loss”, including the emission or puffback of smoke, soot, fumes or vapors from a boiler, furnace or related equipment.

This cause of loss does not include “loss” by smoke from agricultural smudging or industrial operations.

g. Theft, including attempted theft and “loss” of property from a known location when it is likely that the property has been stolen.

This cause of loss does not include “loss” caused by or resulting from theft:

(1)Discovered on taking inventory;

(2)Due to wrongful conversion or embezzlement;

(3)Due to disappearance of any property unless there is evidence that the property was stolen;

(4)Due to acceptance of counterfeit money, fraudulent post office or express money orders, or checks or promissory notes not paid upon presentation; or

(5)Due to unauthorized instructions to transfer property to any person or to any place.

h.Sinkhole Collapse, meaning “loss” caused by the sudden sinking or collapse of land into underground empty spaces created by the action of water on limestone or dolomite. This cause of loss does not include the:

(1)Cost of filling sinkholes; or

(2)Sinking or collapse of land into manmade underground cavities.

i.Volcanic Action, meaning direct “loss” resulting from the eruption of a volcano when the “loss” is caused by:

(1)Airborne volcanic blast or airborne shock waves;

(2)Ash, dust or particulate matter; or

(3)Lava flow.

All volcanic eruptions that occur within any 168-hour period will constitute a single occurrence.

This cause of loss does not include the cost to remove ash, dust or particulate matter that does not cause direct physical “loss” to the Covered Property.

j. Collision Causing Death Of Covered Livestock

We will pay for “loss” of covered “livestock” caused by:

(1)Collision or overturn of a vehicle on which the “livestock” are being transported. Collision means accidental contact of that vehicle with another vehicle or object; or

(2)”Livestock” running into or being struck by a vehicle while the “livestock” are crossing, moving along or standing in a public road.

But we will not pay for “loss” if a vehicle owned or operated by an “insured”:

(1)Collides with the vehicle on which the “livestock” are being transported; or

(2)Strikes “livestock” crossing, moving along or standing in a public road.

k.Vandalism, meaning willful and malicious damage to, or destruction of, “livestock”.

l.Earthquake

m.Flood, surface water, waves (including tidal wave and tsunami), tides, tidal water, overflow of any body of water, or spray from any of these, all whether or not driven by wind (including storm surge).

Analysis

The insuring agreement of the livestock coverage form promises to pay for “loss” of or “damage to” covered property. “Loss” is defined as the death or destruction of livestock. Coverage is equivalent to that afforded under the basic causes of loss from farm property coverage form FP 10 60 02 09 (under the current program; the prior form was FP 10 60 09 03).

Note, however, that the causes of loss have been tailored to fit livestock. For example, the peril of windstorm or hail does not include loss of livestock caused by freezing or smothering (as when frightened animals crowd into each other). The peril of “aircraft” means only direct contact with an aircraft (or contact of the aircraft with a building or structure containing covered property), so that if cattle stampede because of a low-flying aircraft, there is no coverage.

Provisions of other inland marine forms are incorporated into the covered causes of loss. The peril of “theft” does not include theft discovered upon taking inventory, for example. Wrongful conversion, unauthorized instructions to transfer property, or loss caused by acceptance of counterfeit money are not covered.

Two coverages are worth noting. The first is for collision. Since a common cause of loss to livestock is being hit on a public road, this kind of loss is covered. There is coverage if a vehicle transporting livestock is struck or is overturned, causing loss. If, however, a vehicle driven by an insured strikes covered livestock in a road, or hits a vehicle transporting the insured livestock, there is no coverage. The second noteworthy coverage is for vandalism. While many property forms refer to “vandalism or malicious mischief” (see, for example, the ISO homeowners forms), this form states that vandalism is “willful and malicious damage to, or destruction, of 'livestock'.” Although some acts of vandalism are such that malicious intent may be inferred, many acts that commonly are held to be vandalism could be excluded from coverage since no malicious intent can be proven. So, for example, a low-flying plane might deliberately stampede cattle. However, the same low-flying plane might be flown by someone so mentally imbalanced that no malicious intent could be inferred, since the perpetrator was incapable of reason. In that case, it might be that only the court could decide if the coverage encompassed such an act.

As is common with inland marine forms, there is coverage for loss from earthquake and flood. The flood coverage has been updated, and includes storm surge whether or not driven by wind.

Additional Coverages