Property exposures come from the heating, refrigeration, and automated milking and processing equipment and presence of flammables such as grain, feed, and bedding materials. Dairies are commonly located in rural areas with limited firefighting resources and water supply. All machinery and equipment must be inspected and maintained regularly to avoid wear and tear or overheating losses. Wiring must be up to date and of sufficient capacity. All machinery should be grounded to prevent static buildup and discharge. Electrical fixtures should be dust and moisture proof. Due to its combustibility, an ammonia detection system should be in place if ammonia is used as a refrigerant. Dairy products must meet extremely high sterility requirements, with most processes taking place in closed containers to prevent contamination. This sterile environment helps control most fire exposures. However, if a small fire does begin, a total loss could occur as provincial, local, or federal regulations may require the disposal of major portions of stock and raw materials that have been exposed to fire, smoke, heat or water. Spoilage losses can be severe if the refrigeration and cooling equipment malfunctions or loses power. Controls, such as alarms, must be in place to warn if power is out or if temperature rises in coolers and freezers. Emergency backup systems, such as emergency generators, should provide power if an outage or shutdown occurs. The business income exposure can be very high as some production equipment may be difficult to repair or replace quickly.

Equipment breakdown exposure is high due to the automated machinery and equipment used in dairy operations. All machinery and equipment must be regularly inspected and maintained. If there are boilers, operational safety valves must be in place.

Crime exposure is from employee dishonesty of both inventory and money. Background checks should be conducted on all employees. The inventory must be under the supervision of more than one individual so that there are checks and balances. Regular audits by an outside firm should be a standard part of procedures. If drivers pick up checks or accept money, there is an employee dishonesty and theft of money and securities concern. Money can be an exposure if the dairy accepts cash for tours or retail operations.

Inland marine exposure is from accounts receivable, computers, goods in transit, livestock, mobile equipment, and valuable papers and records. Bulk milk is transported in refrigerated tankers that must be used only for milk. Each must be sanitized after each use. The tankers are bulky and will result in a total loss if one overturns due to the potential loss of refrigeration and spoilage. Valuable papers and records exposure is due to animal records, inventory records, customer files, quality control records, and contracts with suppliers and distributors. Very high-valued animals may need Livestock Mortality coverage through a specialty market.

Occupiers’ Liability exposure is moderate as drivers of pickup and delivery vehicles, repairmen, and inspectors regularly visit the premises. There must be clear markings as to where trucks may go, and their movements must be controlled to keep the area safe and secure. If tours are given or the dairy has a retail store on premises, exposures increase significantly. Good housekeeping is critical due to the potential for slips and falls. Spills of liquids should be promptly cleaned and warning signs posted. Exits should be clearly marked and free of obstacles. Adequate interior and exterior lighting should be available in the event of a power outage. Parking lots and sidewalks need to be in good repair, with snow and ice removed.

Products exposures normally result from contamination, spoilage, and foreign objects in the dairy products. Raw milk should be tested before processing into final products or before delivery to milk processors. Good procedures need to be in place for sanitary working and processing conditions. The workplace must be arranged to prevent foreign substances from entering the processing area. An on-site laboratory is recommended to verify quality control. Tanker cleaning must be continual and must be documented. Controls must be in place to prevent contamination from exposure to chemicals such as insecticides and pesticides. Stock dating and rotation are important factors. An effective recall program must be in place that can be activated immediately.

Environmental impairment exposures are high from underground or above-ground fuel tanks and the possible pollution of air, nearby land or groundwater from the odorous gases and wastes from the animals used in the dairy operation. The owner must comply with all applicable provincial regulations. Shipments of manure may result in off-premises pollution in the event of an accident or spill. If there are underground storage tanks, a UST policy will be required.

Automobile exposures may be limited to hired and non-owned since most dairy farmers rely on milk processors to pick up raw milk from the dairy. If the dairy transports milk, milk products or animals, drivers must have appropriate licences and their MVRs must be checked regularly. Vehicles must undergo documented, regular maintenance.

Workers compensation exposures are heavy due to the handling of animals, burns caused by the heating machinery and equipment, back and lifting injuries, or hernia, if manual conveyances are used. The automated machinery can cause injury and loss if not properly guarded. Employees may be exposed to chemicals, excessive noise, or noxious odours from animal waste. Adequate safety equipment should be required for employees in grain storage and animal handling areas. Slips and falls can result if the entire premises, including the floor, is not kept clean. Anhydrous ammonia refrigerants are poisonous when leaked into confined spaces such as coolers. Controls must be in place to maintain, check, and prevent such injury. There may be an occupational disease exposure due to the use of hazardous or toxic chemicals, such as disinfectants, pesticides, fertilizers, and medicines used for the animals. Handling animals and animal parts can result in workers being trampled, stepped on, or exposure to blood borne pathogens.