Emerging Greenhouse Risk and Insurance Trends for 2025

With 2025 around the corner, you’re likely reviewing your greenhouse business and planning around the opportunities and potential challenges that lie ahead.

A good product, a skilled workforce, and a solid sales strategy can set you up for success. Equally important, staying ahead of potential risks and ensuring your insurance coverage evolves alongside your business is critical.

In my role, we help greenhouses navigate emerging challenges and safeguard their success. Each year, we identify new and evolving risks to help educate and protect our customers and other industry professionals.

Here are some of the key trends I see for 2025, and steps you can take to help protect your business.

Uncertainty Surrounding a New Administration

Our industry is buzzing with questions surrounding the new presidential administration taking office in January 2025. Two primary concerns are:

• Potential tariffs altering trade and increasing the price of goods
• A possible labor shortage depending on changes to Farm Bill and H-2A and H-2B labor programs

The new administration has emphasized increasing tariffs on imports, especially from China, to support the production of goods within the U.S. This could cause interest rates to rise, drive up prices for certain goods, and reduce U.S. agricultural exports.

The current Farm Bill expired in 2023, but lawmakers extended it through September 2024. It’s still unclear if a new Farm Bill will be introduced in 2024, or will rollover into 2025. This bill has many aspects, but part of it includes funding for programs and businesses that will be greatly felt if left unresolved.

This uncertainty, coupled with the new administration’s hard stance on immigrants, raises concerns over an even deeper labor shortage for greenhouse operators.

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These are important topics we all need to keep an eye on. In part, you can prepare now by buying supplies early and focusing on employee retention.

Escalating Commercial Auto Insurance Expenses

Conducting deliveries, transporting equipment, and visiting vendors — all these tasks involve hitting the road and increasing the risk of accidents.

Commercial auto liability costs are climbing at an alarming rate across industries, fueled by higher vehicle repair and replacement expenses and a surge in investor-backed litigation. This trend has led to more lawsuits and multi-million-dollar jury awards, some exceeding $10 million.

You can help manage your commercial auto risk by:

• Hiring with safety in mind: Conduct comprehensive background checks and review driving histories to help ensure your drivers are skilled, reliable, and committed to safety.
• Prioritizing safety: Partner with your insurance provider to create a strong driver safety training program, enforce it through clear policies and supervision, and take corrective actions, when needed.
• Assigning a safety lead: Designate a dedicated team member responsible for reducing risks and ensuring all safety protocols are followed throughout your company.
• Leveraging technology: Use telematics to monitor vehicle performance and driver habits, addressing unsafe behaviors as they arise. Dash cams can also protect your business by providing evidence in the event of an accident, potentially reducing liability if your driver isn’t at fault.

Ever-Present Cyber Security Threats

Cyberattacks aren’t going away. As businesses rely on more technology, vulnerabilities increase.

But cybercriminals aren’t just targeting your data — they’re also exploiting the technology used to run your operations.

In an article in Forbes, the FBI cites ransomware attacks, foreign malware, data and intellectual property theft, and bio-terrorism impacting food production and the water supply as the four key threats facing the agriculture sector.

Cyber liability insurance can help cover losses such as:

• Repairing damaged equipment
• Recovering lost revenue during downtime
• Paying regulatory fines
• Covering the cost of customer breach notifications
• Covering the cost of recovering compromised data
• Handling ransomware demands

I encourage you to review my cybersecurity tips and work with your insurance provider to help train your team.

Climate Change Brings Increasing Risk of Business Interruption

Climate change is an ever-present challenge, bringing increasingly severe weather events that impact more regions with greater intensity and frequency. This, combined with rising property values and inflation, are among the reasons experts cite for more billion-dollar weather events.

The number of such events has nearly doubled in the last 12 years, up to 28 in the last year. According to the National Oceanic and Atmospheric Administration, there have been 24 such events in the U.S. through Nov. 1, 2024

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These disasters destroy property, disrupt supply chains, delay shipments, and halt production, which can directly impact your bottom line. Safeguarding your greenhouse business requires proactive preparation and maintenance.

Sean O’Donnell, Vice President of Business Development at LLK Greenhouse Solutions, emphasizes the significance of a comprehensive and holistic approach to risk management in enhancing the resilience of greenhouse operations.

“It’s crucial to anticipate potential challenges and proactively address them,” says O’Donnell. “One effective strategy is to implement a routine schedule for maintenance and structural assessments to identify and rectify vulnerabilities early on. This proactive approach helps prevent significant damages from occurring.”

“Furthermore, comprehensive testing of all systems (e.g., evaporative cooling system, environmental control, and irrigation) is recommended to help prevent malfunctions that could result in crop loss. These proactive measures are designed to ensure continuous operation and effectively manage risk associated with physical infrastructure and operational technologies.”

Keep Your Coverages Current (Secondary Head under Climate Change)

Regularly assess your insurance to ensure it aligns with your risk profile. Business interruption insurance, for example, can help cover lost income and operating expenses if severe weather causes damage to covered property that forces your operation to shut down temporarily.

Update your property insurance to address the unique vulnerabilities of your greenhouse structures and equipment. If you add new structures or replace equipment, for example, this should be reflected in your policy. Work with your provider to tailor coverage to your unique situation.

Insurance Providers Are Leaving the Greenhouse Industry at an Increasing Rate

The insurance market for greenhouse businesses is shrinking. Not only are fewer providers available, but those remaining are also scaling back by dropping specific coverages or significantly raising deductibles.

Businesses are finding it harder to secure affordable and comprehensive protection, especially as severe weather and natural disasters grow more frequent.

Now more than ever, robust risk management strategies are critical. Take proactive steps to reduce your vulnerability to extreme weather by:

Your insurance provider can help you mitigate risks through training, consultations, and safety resources. If possible, work with an insurer that has industry-specific knowledge to help you create a custom insurance plan for the unique risks you face.