by: Wes Ishmael

Run enough bulls long enough and it's not a matter of whether one will become unusable; it's a matter of when and how many.

There are just too many moving parts for it to be otherwise: the vagaries of Mother Nature, disease, intrinsic bull behavior, vast geography, rotten luck.

Easily 80 percent of the problems occur with the first turn-out, based on our data at least,” says John Burbank, Chief Executive Officer of Seedstock Plus. The organization is a cooperative of independent seedstock producers. Bulls are selected from member herds, then developed and acclimated regionally. Seedstock Plus markets approximately 1,000 bulls each year, as well as females.

That's why typical breeding guarantees get at the bull's ability to breed when purchased or by the time it achieves a specific age. You can find plenty of variety, though. Always look at the terms and conditions listed in a sale catalogue for the specifics. In private treaty situations, always be sure to ask about them.

The likelihood that any problems will come in the first breeding season is also why bull buyers inclined toward broader coverage used to be more interested in loss-of-use insurance than mortality policies, explains Jim Gies of Eaton, Colo. Besides running his own cattle operation, Gies is a long-time field representative for Western Livestock Journal. He's also been a livestock insurance agent for American Live Stock Insurance (ALSI—Harding and Harding until a year ago) for 10 years.

Plenty of folks would still like to insure against loss of use. Unfortunately, ALSI and other livestock insurance agencies did away with such policies several years ago. In their place, some full service seedstock suppliers have expanded the protection they provide.

At Seedstock Plus, for instance, buyers can choose to pay four percent of the bull's purchase price at the time of sale for what amounts to a no-fault insurance policy. “If a buyer has a problem with a bull any time during the first breeding season, we just take care of it,” says Burbank.

More specifically, from busted shoulders and penises, to a lightening strike, to slipping through a makeshift fence to become the hood ornament on a train engine, the buyer is covered by Seedstock Plus' no-fault insurance. Bulls are quickly replaced with another one of comparable quality, or at the buyer's discretion, they receive credit toward purchase of another bull at a future sale.

“We still guarantee all of our bulls for the things we believe breeders should be catching on the front side—fertility, disposition and feet and legs—whether or not buyers purchase the insurance,” explains Burbank. “But, we felt like it was important to provide buyers with an opportunity to obtain insurance against the loss of use for the first breeding season. We felt like it was essential to provide it at an affordable price and in a straight-forward manner with no fine print.”

About half of the buyers opt for the insurance, says Burbank.

“I encourage buyers to take it because I believe it's a sound business deal,” says Burbank. “If I spend $3,000 for a bull, that's a sizeable investment. If you get half-way through the breeding season and something happens to him unrelated to his ability to breed cows—those things covered by the breeding guarantee—the insurance means you're assured of a quick replacement of comparable quality.”

Seedstock Plus also helps customers declining the coverage to find replacements, but the company has more options with customers who have paid for the added cost associated with replacement.

“At four percent, the organization is subsidizing the program, but at that rate replacing bulls is economically feasible for us and our customers,” says Burbank. Plus, he explains sharing the cost of the insurance program tends to encourage closer bull management.

When customers weren't paying for the coverage—Seedstock Plus used to offer it free—Burbank says it was too easy for some to let the basics slide. For instance, leaving too many bulls in the same pasture at the end of breeding season, which is an invitation to bull injury.

Look around the industry and you can find a variety of coverage options that some seedstock suppliers offer beyond the basic breeding guarantee. There's no-fault coverage like that provided by Seedstock Plus. There's coverage that applies to specific injuries or events. You can find coverage that comes with no fine print, or lots of it.

Similarly, seedstock suppliers provide added coverage in a variety of ways. Some cost-share, some provide coverage but don't subsidize it, some provide it fully. Some limit such coverage to specific animals. You get the idea.

That's why Gies cautions bull buyers to ask enough questions to know exactly what protection they're getting with the bulls they purchase. That means understanding the breeding guarantee, as well as any warranty and insurance programs unique to the seedstock supplier.

Equal Need and Opportunity

Though you'd be hard-pressed to find any commercial policies available today for loss of use, Gies points out some mortality policies like those offered by ALSI come with limited-risk provisions that cover such things as accidental shooting, fires and such.

For perspective, an ALSI mortality policy costs six percent of the bull's purchase price for 12 months of coverage; four percent for six months. In some cases Gies says the seller will provide the buyer with the policy, or share the cost.

Even when it comes to mortality insurance, Gies says commercial producers are as likely as seedstock producers to purchase coverage. In both cases, he notes it can be a personal risk management decision or one required by a lender, whether or not the bull comes with a breeding guarantee.

If the seller wants added protection—whether offered by commercial agents or seedstock suppliers—Gies suggests bull buyers dig deep enough to understand not only what protection their money is buying, but how any claims will be handled.

“You want a company that settles claims quickly and fairly,” says Gies. Ask around just a little and you can find folks who thought they were buying coverage for something that wasn't covered when a problem arose. You'll also find some who had legitimate claims, but felt like the defendant rather than the victim by the time an unscrupulous insurance company got done raking them over the coals.

As with buying the bull himself, Gies say obtaining protection boils down to familiarity and trust as much as anything. Chances are you don't buy bulls from programs you know nothing about. Likewise, he recommends knowing something about the outfit you're considering for insurance. What's their reputation and history? Are the people selling it part of the cattle business? Does anyone you know have experience with them? That kind of thing.

“You feel most comfortable dealing with people whom you know understand your business, as well as the products they're offering you to help with that business,” says Gies.


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