British farmers risk being underinsured as cattle prices continue to surge, a rural insurance specialist has warned.

Toby Baker, of Lincoln-based insurance broker Dallas Scott Davey, said many policies haven’t kept pace with rising livestock values, leaving farmers exposed.

“Livestock prices have increased over the past 12 months, with significant rises recorded across all classes of cattle – from dairy herds and suckler cows to store cattle, prime fat stock and calves,” he said.

He explained that most policies are renewed annually without adjusting for real-time market changes.

"As cattle prices continue to strengthen, the gap between market value and insured value is growing,” Baker said.

“Increasingly, farmers are finding that their existing insurance no longer provides adequate cover."

He pointed out that in June 2024, finished cattle were fetching around 476p/kg deadweight. By May 2025, that had risen to roughly 650p/kg. Store cattle once insured at £1600 now sell for £2400, while top-quality fat cattle are reaching over £3000 at some markets.

Baker also warned of the financial risks of underinsurance. Due to the 'average' clause in many policies, claims are reduced if livestock is underinsured.

“If livestock is underinsured, any claim will be reduced in proportion to the shortfall,” he explained.

“The result can be a costly surprise at the worst possible time. There is a legal duty of ongoing disclosure, and failing to update a policy could lead to significant financial loss.”

He urged farmers to review their policies regularly, especially with further cattle price volatility expected over the next two years.

“While it’s tempting to keep premiums low, the risk of being underinsured could far outweigh any short-term savings,” he said.

““We strongly advise routine consideration and discussions with an experienced rural insurance adviser to ensure that cover is appropriate."

Source - https://www.northernfarmer.co.uk