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Concepts of insurance for poultry

The Oriental Insurance Co. Ltd. ,Divisional Office – 2
11-6-191, Nampally, Hyderabad 500 001 .
Email: [email protected]



Inspite of all precautions, accidents do occur. Earth quakes, floods and cyclones occur frequently causing loss of lives and damage to property. Hence, it is necessary to adopt more effective techniques or devices or methods to deal with the problem ‘risk’ in modern society. Insurance is one of the important methods to deal with risk where by it is transferred to an insurer.

Inherent Risk

Human life and material possessions are continuously exposed to loss or damage by numerous destructive forces. There is a great deal of uncertainty in life, commerce and industry. Risk is inherent and uncertainty is a fundamental fact of life. Human beings have a strong desire for security of their lives and possessions. This desire for security is to be satisfied by taking all precautions possible to avoid or prevent the consequences of risk.

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Insurance Concept

Insurance is a concept which provides for collection of small amounts of premium from many individuals and firms out of which losses suffered by a few are reimbursed.

Insurance in India

References to insurance are found in “Manu Dharma Shastra” (Code of Manu). Earliest transactions of insurance are traced to the beginning of the fourteenth century in Northern Italy. However, insurance was established in India only at the beginning of the 19 th century.

In 1972, the General Insurance Business ( Nationalisation) Act, 1972 was passed. Under the provisions of this Act, the General Insurance Corporation of India was established by the Government with effect from 01.01.1973. All the 107 insurance companies were merged with one or the other of the four subsidiaries of the General Insurance Corporation there after. The four subsidiary companies are :

The Oriental Insurance Company Limited

New India Assurance Company Limited

National Insurance Company Limited

United India Insurance Company Limited

In tune with the social objective of the Government soon after Nationalisation, all the insurance companies have developed packages which cater to the needs of rural India. In this process, insurance of cattle, sheep, dog, poultry Honeybee, Sericulture and other livestock is facilitated. Financial institutions have taken a policy decision that all livestock and poultry units financed by them are to be insured.

Insurance industry is opened to private players as per IRDA Act 2000 and a few private players have started insurance business in India.

Poultry Industry:

India ranks amongst the best in world for poultry population. It ranks 4 th in egg production thousand MT egg mass) and 5th in broiler production (1600 million broiler). The layer industry is growing at an average level of 4-6% and broiler industry by 8-10% per annum. The annual per capita availability of eggs and broiler meat is 38 and 1150 gms., respectively. The recommended consumption level is 180 eggs and 10.8 kg poultry meat per head per annum. This shows the scope for further growth of Poultry Industry. However, the poultry farmers suffered many losses due to epidemic diseases and natural calamities like cyclones, floods, earth quakes etc. At times, the magnitude of losses is so severe that the farmers find difficult to get back into farming again.

Insurance Packages for Poultry Industry

This is where the insurance would take care the poultry farmers whenever they are exposed to the above stated risks.This is explained by the following example.

Poultry Farm of 10000 birds

Peak value of Bird Rs.75/- premium rate 3.5%

Premium payable for year : Rs.28928/-

Premium for 5 years Rs.144640/-

If there be a loss once in 5 years and assuming that 20% of Birds die, compensation payale to the farmer (Rs.1,50,000) is equal to the premium paid by him. However, if the loss is more, it would have a heavy financial impact on the farmer. Losses suffered by farmers of coastal Andhra Pradesh are 50% to 75% of flock during cyclone of 1990 and outbreake of Gumbaro disease during 1996. Those farmers having insurance to their farms are able to continue in Poultry industry because of prompt and effective settlement of claims. Those farmers who have not insured their farms could not come back.

Indian Insurance Industry has developed many packages which will take care of the following possessions of the poultry farmers :

Poultry houses and equipment like Sprinklers, Cages, Waterers, Feeders

Poultry Birds

Feed mixing plant, raw material for poultry feed and feed mix

Personal assets of the poultry farmers in his house

Health requirements of the farmer

Important products available are :

Poultry insurance for poultry stock

Fire insurance for poultry houses, feed plant, sprinklers, feed stock etc

House Holder’s insurance of assets of poultry farmer at his residence

Personal Accident insurance for the farmer and his family members

Health insurance for the farmer and his family members

More about

Comprehensive Coverage for Poultry Birds

Scope :

For the purpose of insurance the word ‘poultry’ refers to layers, broilers and the breeding stock, which are exotic and cross-bred. Indigenous and non-descript birds will not be insured.

  • Exotic birds means the parents of reputed foreign breed, and also those produced in India, but with high productivity, whose parents are top foreign breed, which birds born in India as well as those born abroad.
  • A cross-bred for the insurance purpose means one of whose parents is of foreign breed.
  • Proposals in respect of birds other than above do not fall within the perview of this insurance.

Applicability :

  • The scheme is applicable to poultry farms consisting of all types of exotic and cross-bred poultry birds in India.
  • All birds in a farm should be covered. After issuing the policy, if additional birds are introduced in the farm, immediate notice to be given to insurer otherwise claim will be repudiated.
  • This scheme is applicable to poultry farms consisting of minimum number birds as follows:

Broilers – 100 per batch

Layers - 500 per batch

Hatchery – 2000 per batch

Table – I: Birdwise age, Premium and Sum Insured

Type of Birds

Age Group



Max Sum Insured

(Peak value per bird) (Market)


1 day to 20 weeks

21 weeks to 72 week


1 day to 72 weeks

3.20 % on peak value

3.50 % on peak value

Rs. 75/-


1 day to 8 weeks

1 day to 6 weeks

5.50 % on peak value

1.20 % per batch or 4.80 % annual

Rs. 45/-

Parent Stock

1 day to 72 weeks

5 % on peak value

Negotiable with documentary evidence

Table- II :Valuation factor for Broiler chicks.

 Valuation chart will be worked out on the basis of multiple factor given in the formula as shown hereunder :


Multiplying Factor

















The multiplier is to be applied together to the prevailing feed cost and day old chick cost, to arrive at week-wise valuation.

Table III – Valuation factor for layer birds



























































The multiplier is to be applied together to the prevailing feed cost and day old chick cost, to arrive at week wise valuation.

Insurance Coverage:

The policy shall provide indemnity against death of birds due to accident (including fire, lighting, flood, cyclone, strike, riot and civil commotion and terrorism) or diseases contracted or occurring during the period of insurance subject to the following exclusions

  • Malicious/willful injury.
  • Transit by any mode of transit.
  • Improper management (including over crowding)
  • Undergrowth, cannibalism, action of predators like preying birds and carnivorous animals.
  • Theft and clandestine sale of birds.

Intentional slaughter of the birds except in cases where destruction is necessary to terminate incurable suffering on humane consideration and to protect the remaining healthy flocks to reduce additional losses on the basis of certificate issued by qualified Veterinary Surgeon or in cases where destruction by order of lawfully constituted authority under intimation to Insurance Company.

Consequential loss however caused.

Permanent and partial disablement of any nature.

Loss of production.

Marek’s disease, Ranikhet disease, fowl pox and infectious bronchitis. These diseases are covered by the policy if the birds are successfully inoculated against these diseases and the necessary veterinary certificate to that effect is supplied to the company. Coccidiosis and other diseases are covered only if preventive and curative measures are taken from time to time. The farm should be closed for 2 months if epidemic disease occurs.

Malnutrition/shortage of water, death due to starvation because of non supply of feed to farm due to any reason whatsoever.

Under growth


Loss due to huddling and/or piling of birds

Avian Leucosis Complex (ALC)

War, invasion, act of foreign enemy, hostilities (whether war be declared or not) civil war, rebellion, revolution, insurrection, mutiny, tumult, military or usurped power or any consequences thereof or attempt thereat.

Any accidental loss, destruction, damage or legal liability directly or indirectly caused or contributed to by or arising from nuclear weapons.

Veterinary Examination

A Veterinary Certificate from a qualified veterinarian or the consultant veterinarian of the insured is necessary.

In case of layer farms having more than 5000 birds inspection of the farm should be preferably done by Company’s Veterinary Officer.

Veterinary health examination fees should be borne by the insurer

The insurer reserves the right to check periodically and depute for the purpose thereof any representative.

Veterinary report should in all cases be sent to company and should not be handed over to the propose.

Good Features Discount

The discount not exceeding 5% on premium may be allowed if the farm is having any five good features listed below :

  • Farms having resident/own veterinary officer or farms managed by veterinary doctors.
  • Farms with layers flock of 10,000 per batch and above or broiler flock of 50,000 per batch and above.
  • Farms having good dead bird disposal system i.e. the farms with incinerator.
  • Farms with standard layout such as good distance between sheds, fencing and breaker trees etc.
  • Farms with sophisticated equipments i.e. farms with automatic feeders, waters etc.
  • Farms with mortality less than 5% in previous batch.
  • Presence of thermo regulators to control temperature and humidity.

The above good features should be certified by the Company’s representative.


  • Poultry farm should have veterinary facility of its own or on consultancy.
  • Proper balanced standard feed, water and light should be supplied to birds.
  • Debeaking and deworming should be carried out regularly and record to that effect has to be maintained.
  • The minimum number of birds, prescribed have to be maintained and all the birds should be covered on flock basis thus no identification is necessary.
  • Proposer must keep all the essential records as mentioned below at the farm

Flock record on day to day basis – daily stock register

Mortality Record

Culling Register

Vaccination and inoculation particulars

Feed consumption

Production record


Incidence of diseases

Purchases and sales

  • Answers to al the questions in the proposal form and health certificate should be properly answered without any blank.
  • Any change of birds should be informed immediately to the concerned office and new birds being added into the batch should pass through the Veterinarian Examination.
  • Transfer of interest/ownerships is not allowed.
  • The cages used must be of normal standard dimensions and maintained properly.
  • All birds in the farm/shed should be insured.

Procedure for Claim Settlement

Admissibility of the claim

Claim under the policy would be admissible only if the mortality in the flock exceeds beyond the excess limit given below

Table – IV : Claim for Broiler and Layer



1 day old to 8 weeks

5 % of population in each batch



1 day old to 8 weeks

5 % of population in each batch

9 th week to 20 weeks

3 % of population on remaining birds

21 st week to 72 weeks

1 % of population in every month on remaining birds i.e. at the beginning of 21 st week and then every month

  • Liability of the company – the insured will be indemnified for 80 % of the value of the bird at the time of death as per the valuation table.

For claims out of Gumboro disease, additional excess @ 20 % would be applied.

Claims Procedure

In the event of death of birds, immediate intimation should be given to the company and the insurer should be supplied with the following documents and required information.

      • Duly filled claim form
      • Post Mortem Report
      • Daily records of mortality, feeding etc.
      • Purchase invoices for the birds
      • Any other proof to substantiate the loss like photographs, medical bills etc. as and when required.

In the case of alarming death, out-break of epidemic nature, immediate notice with in 12 hours should be given to the company and all birds should be segregated and produced to the representative of the company or to any person authorized by the company for inspection.

Daily mortality details should be sent to the company on weekly basis failing which report will be treated as NIL for that particular week.

Delay in reporting of the claim should be avoided and if there is delay for more than three days, the claim would be treated as non – standard.


During the outbreak of epidemic, natural calamities in the farm, insured should arrange emergency sale of live in the presence of the representative of the insurance company in order to avert or minimise the loss. In case the insured realises the values less than the valuation table agreed upon for the corresponding week, then the difference will be paid to the insured as per terms and conditions of the policy.

Various Standard Forms

Proposal form

Veterinary certificate for acceptance of risk (Fitness Certificate)

Claim Form

Veterinary Certificate to be submitted during claims :

Death Certificate and Post Mortem Report

Insurance for Assets in the poultry farm excluding birds

Assets of the poultry farm, like houses, equipment, quarters can be insured under Standard Fire and Special Perils Policy.

Scope of Coverage :

Fire, lightning, explosion/implosion, aircraft damage, riot-strike and malicious damage, storm, cyclone, typhoon, tempest, hurricane, tornado, flood and inundation, impact damage, subsidence and landslide include rockslide, bursting and/or over-flowing of water tanks apparatus and pipes, missile testing operation, leakage from automatic sprinkler installations, bush fire.

Note. Definition of each peril covered under standard fire and special perils policy are as per Section –II of All India Fire Tariff.

Major Exclusions :

The first 5% of each and every claim subject to minimum of Rs. 10,000/- in respect of each and every loss arising out of ‘Act of God’ perils such as lightning, STFI, subsidence, landslide and rockslide cover under the policy.

The first Rs. 10,000/-, for each and every loss arising out of other than AOG perils. Excess shall apply per event per insured. Excess clause will not be applicable to policies which cover dwellings.

Loss, destruction or damage to bullion or unset precious stones, any curious or works of art for an amount exceeding Rs. 10,000/-, goods held in trust or on commission, manuscripts, plans, drawings, securities, obligations or documents of any kind, stamps, coins or paper money, cheques, books of accounts or other business books, computer system records, explosives unless other wise expressly stated in the policy.

Loss, destruction or damage to any electrical machine apparatus, fixture or fitting arising from or occassioned by over-running, excessive pressure, short-circuiting, arcing, Self heating or leakage of electricity from whatever cause (lightning included) provided that this exclusion shall apply only to the particular electrical machine, apparatus, fixture for fitting so affected and not to other machines, apparatus, fixture or fittings which may be destroyed or damaged by fire so set up.

We also have policies for personal insurance for promoters/owners, employees and staff working in the farm. These policies can also be extended to cover their families. To name a few, Personal Accident Insurance Policy, Mediclaim Policy, Householders Policy and Vehicle Insurance etc.


Many farmers are reluctant to take insurance as they find the premium is high. Financial institutions should make insurance a mandatory component in the project in the interest of the farmers as being done for various other schemes. This helps in substantial reduction of premium cost. Farmers should maintain proper records which results in hastle-free and satisfactory claim settlement. Insurance helps the farmer to sustain in poultry business when the farms are affected by epidemic diseases/ Natural calamities. Insurance should be utilised not to be exploited.

Source : IPSACON-2005