Grain Elevators: Combustion Risks & Insurance
A grain elevator is a facility designed to store grain. It is typically built with a tall frame made of metal or concrete with a compartmented interior and an elevator or conveyor which scoops up grain from a lower level and deposits it into a silo. With gravity, the elevated grain is able to be unloaded quickly using chutes.
This design has been reinforced out of necessity. Early grain elevators were made of wood and were extremely prone to fire or even combustion. One notable explosion occurred in 1878 in Minneapolis, Minnesota. The explosion “killed 18 people, leveled two nearby mills, damaged many others, and caused a destructive fire that gutted much of the nearby milling district“ (Wikipedia).
Even with sturdier construction modifications, grain mills haven proven to be a risky venture. When “organic substances are divided finely, they can become an explosive material when dispersed as an air suspension; hence, a very fine flour is dangerously explosive in air suspension” (Wikipedia). This poses a significant threat to grain millers as well as the insurers that aim to protect these fire-prone structures.
The Occupational Safety and Health Administration, from the US Department of Labor, determined there to have been over 500 explosions from 1976 - 2008. Though the frequency of explosions has certainly diminished since 2000 with advances available to reduce combustion, the threat is still imminent in these operations.
In recent years, insurance companies have begun to shy away from risks that are historically challenging - especially when large TIVs are involved since repairs are extremely costly. This has left a gap in the insurance market for grain elevator operators, and has almost completely dissolved any options for those who have experienced prior losses.
Flex, a property-only insurance product created by Agribusiness Risk Underwriters, was designed specifically to provide a solution to the frustrating lack of coverage offered by other companies. The reason we can successfully underwrite accounts that other companies can’t place is our superior loss control process. We utilize professionals in the agriculture space, from engineers to electricians, to help us help farmers mitigate loss exposure. No other company in this space is helping their customers to prevent loss and keep them up and running. Our loss control process is so advanced that we are able to offer $15M TIV limits. This is nearly 3 times what most of our competitors are offering.
Flex utilizes this methodology for grain elevator accounts, and many other types of “hard-to-place” accounts such as:
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**PLEASE NOTE THAT ARU MARKETS OUR PRODUCTS ONLY THROUGH LICENSED INSURANCE BROKERS. WE ARE NOT ABLE TO PROVIDE QUOTES OR INSURANCE GUIDANCE FOR FARM OWNERS**