1. E&O Risk Management: Meeting the Challenge of Change
Reducing E&O Exposure in Placement of Crop Insurance

2. Overview
Unique nature of crop program can create additional E&O exposure
Review:
Overview of common crop policy
Important deadlines
Crop forms
Assist agents in recognizing where potential errors or omissions are more likely to occur during the process
Reducing E&O Exposure in Placement of Crop Insurance

3. Common Crop Policy
Risk Management Agency (RMA) administers the Federal Crop Insurance Program
Crop policy form is similar to traditional P&C forms
Multi-peril crop insurance policy (MPCI) is continuous until cancelled
Renews as is unless change made prior to sales closing date
Reducing E&O Exposure in Placement of Crop Insurance

4. Application/Coverage Change Form
Application must include:
Coverage level
Coverage elections
Coverage type
Coverage endorsements for each crop year
Information must be submitted no later than the sales closing date
Reducing E&O Exposure in Placement of Crop Insurance

5. What is covered?
Adverse weather conditions
Fire (natural causes)
Insects
Earthquake
Decline in harvest price
Plant disease
Wildlife
Earthquakes
Volcanic eruption
Failure of irrigation water supply
Understand the coverage you are selling – dabbling invites E&O claims
Dates are critical
Reducing E&O Exposure in Placement of Crop Insurance

6. What is NOT covered?
Negligence, mismanagement or wrongdoing by the insured
Failure to follow recognized good farming practices
Water that is contained by or within structures that are designed to contain a specific amount of water such as dams
Failure or breakdown of irrigation equipment
Failure to carry out a good irrigation practice
Any cause of loss that results in damages that are not evident or would not have been evident during the insurance period
Upfront time with the customer on what is and is NOT covered can prevent E&O claims and aid in defense of one.
Reducing E&O Exposure in Placement of Crop Insurance

7. Acreage Reporting Date
Important Deadlines
Sales Closing Date
What: Last day to apply for crop coverage
When: March 15th for common spring crops and September 30th for common fall/winter crops
Refer to RMA guidelines for your specific region and crop.
Final Planting Date
What: The last date for a specific crop to be initially planted in order for it to be insured for the full production guarantee or amount of insurance per acre.
When: Changes each year for each crop. Check regional guidelines for the specific date.
Acreage Reporting Date
What: The last date to report the acreage planted and various other information on the Acreage Report.
When: Depends on the crop being planted. Refer to your regional guidelines for the date.
Missed deadlines for any of these can result in no coverage for that crop that year.
Reducing E&O Exposure in Placement of Crop Insurance

8. Important Deadlines Date to File Notice of Crop Damage
What: Claim for indemnity due to crop damage or revenue loss.
When: Crop carrier should be placed on notice of crop damage or potential crop damage no later than 72 hours after discovery of damage for a planted crop but not later than 15 days after the insurance period; if no crop damage or loss of production but a revenue loss on a revenue protection plan, no later than 45 days after the latest date the harvest price is released. For prevented planting claims, no later than 72 hours after the final planting date or it is determined that replanting is not possible during the late planting period.
End of Insurance Period
What: Last date the insurance coverage ceases for the crop.
When: Total destruction of the insured crop; harvest of the insured crop; final adjustment of a loss on a unit; the calendar date contained in the crop provisions or special provisions; the end of the insurance period; or abandonment of the insured crop.
Customers need to know these dates to insure coverage.
Reducing E&O Exposure in Placement of Crop Insurance

9. Production Reporting Date
Important Deadlines
Payment Due Date
What: Last day to pay the premium without being charged interest.
When: Premium is not owed in advance of the MPCI policy providing coverage until after harvest. If there is an indemnity payment owed to the named insured, the carrier will automatically reduce this indemnity payment by the premium owed.
Production Reporting Date
What: Last day to report production for Actual Production History; Actual Revenue History, Revenue Protection, and Revenue Protection with Harvest Price Exclusion Option.
When: By the earlier of the acreage report or 45 days after the cancellation of the policy.
Reducing E&O Exposure in Placement of Crop Insurance

10. Application/Coverage Change Forms
Used for new policies and each year for renewal policies that have changed.
Completed and SIGNED by March 15th each year for spring crops, September 30th for winter.
Three weeks for agent to send to carrier.
Risk Management Tips:
Be organized and proactive.
Have a plan for contacting customers well in advance.
Always inquire about changes in customer operations.
Reducing E&O Exposure in Placement of Crop Insurance

11. Application/Coverage Change Forms
With large amount of information required, applications are ripe for E&O claims.
Due to RMA’s strict enforcement deadline, applications are set in stone.
One missed box can have a great impact on coverage!
Claim Examples and Risk Management Tips
Reducing E&O Exposure in Placement of Crop Insurance

12. Acreage Reporting Form
Submitted for each insured crop on or before acreage reporting date.
Lists the amount of acres of each crop planted.
Filing of Acreage Report is the trigger for attachment of coverage for the crops planted.
Due 30 days after the final planting date established by the RMA for that crop in your region. Check the regional guidelines for the exact date for your region.
Reducing E&O Exposure in Placement of Crop Insurance

13. Acreage Reporting Form
Prime place for errors.
Customer provides FSA 578 and aerial map of certified acres to the agency.
Acreage Report and FSA must match exactly.
Omitted acreage can impact indemnity payment on a crop or revenue loss.
PITFALL! - Be sure to accurately key data from the FSA 578 to carrier’s acreage report exactly.
Reducing E&O Exposure in Placement of Crop Insurance

14. Acreage Reporting Form
Omission of acreage, calculation errors, and clerical errors by the agency can be corrected if no claim has been filed prior to the request to correct the amount of acreage
Don’t delay if any inaccuracies noticed
Claim Examples and Risk Management Tips
Important: Always have the named insured review and sign completed form prior to submission.
Reducing E&O Exposure in Placement of Crop Insurance

15. Summary of Coverage Equivalent of Declarations Page
Acreage Report is the source of information
Last document in MPCI policy cycle prior to harvest
Claims Example and Risk Management Tips
Important:
Agent should review Summary and compare to application and Acreage Report.
Send a copy to named insured immediately.
Reducing E&O Exposure in Placement of Crop Insurance

16. Production Report Records the annual production of each crop
After harvest, insured receipts or reports to prepare Production Report
Must be provided to the agent
Determines if indemnity payment is owed and the average yield for next crop insurance year
Agent has duty to forward production information to carrier
Assigned Yield vs. Actual Yield
Reducing E&O Exposure in Placement of Crop Insurance

17. Crop Provisions
Each type of insurable crop has specific provisions applicable to it
“Nuts and bolts” of coverage for specific crop
Agents need to be familiar with specific provisions to avoid misrepresentation claims
Reducing E&O Exposure in Placement of Crop Insurance

18. Policy Endorsements/Options
Be familiar with policy endorsements and options
Must be applied for on or before sales closing date:
Examples: Catastrophic Risk Protection Endorsement; High-Risk Alternate Coverage Endorsement (HR-ACE); Prevented Planting Endorsement; Green Snap Endorsement
Claim Example and Risk Management Tip
Reducing E&O Exposure in Placement of Crop Insurance

19. Appealing Claim Disputes
Appeals process regarding any decision made by the Federal Crop Insurance Corporation
Information available on RMA website or ask your underwriter
E&O carrier may be able to assist with the matter
Reducing E&O Exposure in Placement of Crop Insurance

20. Crop Risk Management Checklist
Available at or in student materials.
Internal Crop Risk Management Checklist
Customer Name:
Date:
Was each question on the application gone over with the named insured prior to completing the application?
 Yes  No
Was “New Producer” information shared and explained with the named insured?
Did the named insured review the application prior to initialing each page and signing the application?
Were all changes made prior to obtaining the signature from the named insured?
Reducing E&O Exposure in Placement of Crop Insurance