November 12, 2025 • 42 mins
What if your hen house burned tonight—would your plan hold? We sit down with Brett Cohrs, CRM and Senior Vice President at Palomar Insurance, to unpack what’s really changing in poultry insurance and how leaders can turn risk management into a competitive edge. From rate softening for large layered property programs to tighter appetites for smaller growers, Brett explains why deductibles are climbing, which choices actually move premiums, and how to prepare your balance sheet for higher retention without jeopardizing growth.
We get specific about fire risk in modern barns. Annual infrared scanning, true 100‑foot separation, and two‑hour fire doors in corridors and processing areas now sit at the center of underwriting scrutiny. Cage‑free has multiplied exposure: bigger single‑site values, more motors and controls, and dust acting as fine fuel. We talk through why control systems built to protect birds can unintentionally feed a blaze, and how purpose‑built barn technology can detect abnormal heat, trigger early response, and keep a local incident from becoming a total loss.
Beyond property, Brett maps the risk terrain producers often overlook: product recall in decentralized models, employment practices liability as regulations shift, cyber exposures to connected controls, and the market shocks that turn a covered loss into a larger business interruption claim. He shares practical guidance for building a winning submission—accurate valuations, defensible BI calculations, documented maintenance, and clear contingencies for parts, graders, and egg sourcing—plus scenario exercises every manager should run before renewal.
If you lead an egg or poultry operation, this conversation will help you decide where to invest first, which practices underwriters reward, and how to design a program that survives bad days and funds growth on good ones. Subscribe, share with your team, and leave a review with the one change you’ll make next week to improve your farm’s risk posture.
Hosted by Brandon Mulnix - Director of Commercial Accounts - Prism Controls
The Poultry Leadership Podcast is only possible because of its sponsor, Prism Controls
Find out more about them at www.prismcontrols.com
Mark as Played
Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Brandon Mulnix (00:00):
Hey, Poultry Leadership Podcast.
Before we dive into thisepisode, I want to make sure
that it's very, very clear.
At no point are we going to betalking about actual insurance
rates.
We're not going to be talkingabout actual this will get you
this or anything like that.
So I have to be a disclaimerthere because this topic we're
talking about today is very,very sensitive to your specific
(00:24):
farm, your specific needs.
And if you have any questionsabout that, please don't
hesitate to reach out to me.
If we say something that youquestion or anything like that,
please reach out to me and I'llmake sure we correct it.
But yeah, this is for generaladvice and general knowledge
because every farm is different.
If there's one thing everypoultry business leader is
(01:18):
grappling with right now, it'sthe rising cost and complexity
of risk and insurance.
Today, we have one of the mostdefinitive experts in the field.
He is Brett Cohrs, CRM, SeniorVice President with Palomar
Insurance, the endorsed brokerfor the United Egg Producers.
Brett works every day at theintersection of operational risk
(01:42):
and financial protection,helping producers navigate a
challenging market.
Brett, welcome to the show.
Thank you for having me.
Before we dive into the nutsand bolts of the market, could
you briefly share yourbackground and how you came to
specialize in this unique riskchallenges of the poultry and
egg section?
Brett Cohrs (02:00):
Uh yeah, it's an interesting journey, I would, I
would say, by education, Englishmajor, uh, went into ministry
seminary degree, and thensomehow found myself as an
insurance agent in a uh agencyhere in the Atlanta area.
Spent about 10 to 15 years as ageneralist till uh Palomar
(02:22):
found me.
I came to work for them workingon the with the UEP team of uh
some of the old poultry guys,might remember Des Jan and
Carolyn Grubal, my predecessors,who really are the second
generation of the work in theegg industry that Palomar has
been a part of.
So I I came on as their what wecall a marketer in the
(02:43):
insurance world, which basicallymeans the person who helps
place the coverage for ourclients.
And uh, so I really got a quickeducation on how to put some of
these programs together andwhat the facilities were like.
But I didn't have a farmbackground or anything like
that.
I was just a a uh a curiousmind and um and an insurance guy
(03:05):
who just enjoyed learning a newindustry, and it's it's been a
blast.
Well, you've lived in theAtlanta area for a while.
Tell us a little bit about yourfamily.
Sure.
I uh just celebrated our 20thuh wedding anniversary in May.
I have two kids, 17-year-oldtwin boys and uh 18-year-old
(03:26):
daughter.
They're about you know Irishriplets, I suppose, about 18
months apart, close to it.
Uh my daughter's uh her firstyear in college this year, so
we're uh pretty soon we'll beempty nesters, I suppose.
So just been here really mywhole life, grew up in the
Atlanta area, metro area when Iwent away for college and some
jobs, but I've been back heresince uh about 2020.
(03:47):
Excellent.
Brandon Mulnix (03:48):
Well, let's dive right into some things here,
Brett.
What are two to three majorshifts that you've seen in the
insurance market lately, likerising rates, limited carrier
options, or increasingdeductibles that should keep an
up-and-coming leader up atnight?
Sure.
Brett Cohrs (04:06):
It's been a crazy 10 years since I've been in
here.
We've I've I've seen what feelslike a full insurance cycle,
which in our world might meanrates that were sort of low.
And over the really what mostpeople have experienced the last
probably seven or eight years,probably since 2017, 2018, is uh
(04:27):
steadily increasing rates for avariety of reasons.
At this very juncture, therates, the trend right now is
for rates to be going down forour larger egg producers, the
ones who have found themselvesin those layered property
program structures, havemultiple carriers from anywhere
from 10 to 40 carriers on theirprogram.
(04:50):
For those types of insureds,rates should be going down,
barring a very recent claim,even if the very recent claim be
mitigated by the wholemacroeconomic forces that are
causing insurance rates to godown for everybody in the large
property sector.
(05:11):
That being said, rates arestill going up for smaller
producers, contract farmers,anybody who has maybe less than
100 million in values, who mighthave been with a nationwide
agribusiness or a Westfield orone of those types of carriers.
Those carriers are stilltightening their appetite.
So those, a lot of thoseoperations are finding
(05:32):
themselves in those Lloydprograms or what we call the
excess and surplus linesmarkets.
So for them, rates are goingup.
And everybody still wouldprobably say, even if rates come
down a little bit this year,their percentage of spend on
their insurance is much higherthan it was seven, eight years
ago, three years ago, even fouryears ago.
(05:53):
And it's, you know, maybe alittle bit like the egg market,
probably never going to go backdown to 88 cents for a dozen.
But um some relief is in sightright now, as long as folks have
been keeping up with the riskmanagement commitments and their
uh lock protocols.
Um, so that's the biggest one.
I mean, softening rates havebeen going up steadily for five
(06:15):
years, a little softening rightnow.
Deductibles, part of that, atdeductibles, some of these uh
clients that when I started,they might have had a $50,000 or
$100,000 deductible.
Now they have a $5 milliondeductible.
So there's a lot of riskretention and these just choices
that folks have to make.
You know, that could be a swingin three or four hundred
(06:35):
thousand dollars in premium, um,which is a guaranteed cash in
the pocket or ability to buyhigher limits due to the
increased scale.
So a lot of some of thesechoices have to be made when
they want to make sure we wecover the big loss.
So those deductible choices,even some coverage choices.
Some insureds are deciding, youknow, we're just not going to
(06:56):
cover this group of buildingsanymore.
They're we've depreciated themoff our balance sheet, no big
deal.
We wouldn't build back the sameanyway.
We're just gonna leave thoseoff as a cost-saving technique.
So a lot of deductible choicesversus back in the day when you
just buy a policy and you assumeeverything's covered really
easily.
You really have to look at whatyou're getting.
I would say the third big trendright now, especially it
(07:18):
relates to poultry, istechnology, the increased
importance of using technologyas a risk management tool from
infrared scanning and otherthings that we can we can talk
about uh a little bit later.
But just the there's a goodneed for whether it's
construction materials, fire,fire mitigation, both from uh
(07:38):
availability of water andbuilding wells and things like
that to have that on site toother things.
So just being aware oftechnology, just a just a
greater, I feel like it's a muchsmarter technologically minded
risk manager now that are thatare starting to uh run these
programs.
Brandon Mulnix (07:56):
You mentioned a lot of different, what I'm gonna
say, high-level people orhigh-level topics that, you
know, in a typical farm, it'sowner, it's less likely going to
be the operator that has toworry about these things.
But when it comes to richmanagement stewardship, why is
that important as a coreleadership competency to
(08:19):
understand risk?
And I guess that extendsoutside of just the layer
industry, too, to any business.
Why is it important for leadersto understand risk?
Brett Cohrs (08:27):
It's a good question.
And I wish more businesseswould ask it because risk
management or insurance,especially, is typically seen as
an expense.
It is an expense.
It's not something that thatimproves the bottom line
necessarily.
It steals from the bottom linein a lot of minds.
But my experience over my last23 or 24 years in the insurance
(08:51):
industry overall has been thebest run businesses from a risk
management standpoint seem to bethe businesses that have the
best overtime profitability.
I've worked with a lot ofnonprofits, the best run from a
risk management, the ones whohave all the background checks
in place and the vehicle checksin place, and the you know how
(09:12):
they allow people to work withthe kids in their nonprofit and
things like that.
The ones who have the bestpractices always have the best
donor relationships, and you'llslowly find them taking over,
not taking over, but maybeabsorbing another nonprofit that
might not be as well run fromsome of those standpoints.
And I think we sometimes seethat in the egg industry.
(09:34):
So, as a risk management, asthe stewardship of being on the
cutting edge from a riskmanagement standpoint, checking
into materials, experimentingwith technologies, doing all of
these things.
The ones who seem to be doingthings like that are also the
producers that we often seegrowing one way or the other.
(09:56):
So I think it it's a it's acultural thing.
So from a leadershipstandpoint, I mean, that's sort
of what I see, the symptoms, butinternally I feel like the ones
that are monitoring thesethings, I think it gives
employees more confidence thatthis place is going to be here
for the long haul, that they'respending money that they're not
(10:17):
directly seeing a return on forsafety and for the protection of
the animals, or just to honorcommitments they've made, maybe
to an insurer or to thecommunity around them.
So it could, it can fit in anumber of different categories.
You know, in uh installing asprinkler system is not just
(10:37):
good to convince a carrier, butit also is life safety for
employees if if somethinghappens.
So there's all, you know, in aprocessing facility, I don't
expect a whole lot of sprinklersin uh layer barns or anything
like that.
But so I think from a from fromthat standpoint, uh it seems to
build a long-term successfulorganization if risk management
(11:00):
is at least considered apriority and not a annoyance.
Hopefully that answered thequestion.
Brandon Mulnix (11:07):
But I think it's that's really well said because
I think risk management is partof a company's sustainability
plan.
Are they gonna be around?
Are they gonna not just forthemselves, but are they gonna
be around for their community?
Are they around for theiremployees?
Are they gonna be contributingto the welfare of that
community?
I know a lot of these producersin the industry are probably
(11:30):
the largest employer in theirarea, sometimes in their county.
And so when they have an issue,it affects jobs, it affects the
local grocery store if peopledon't have money to spend.
And it really does, and I Ilove the way our our industry
gives back to their communities,but this is one of those things
(11:50):
that if they have a fire, itreally does tax the community a
lot.
If they have to buildinfrastructure, let's say, for
water, uh, a water tower orsomething, that's something that
some producers end up utilizingfor the community as well.
It's it's not just a, hey,we're building it for us, but
we're actually building it forour community.
(12:10):
So the money is well spent inthat area.
It's just hard to spend becauseit's not an emergency.
You're building on your future.
And and how many of us like tospend that money that says, hey,
this might happen.
Let's let's just take, youknow, let's just kind of put
Murphy as in Murphy's Law out ofbusiness, or they're gonna
they're gonna come and it'sgonna be a bad day when I don't
(12:32):
do it.
Brett Cohrs (12:33):
Yeah, same principle of, you know, you're
building a building a house, youknow, you you can you can make
the most gorgeous, beautifulhouse with the beautiful
interior layout and fixtures andall that.
And if the if the if thefoundation is bad, not up to
code, and then all of a suddenyou see that crack happen in the
wall, you know, it it renderseverything else you're doing a
(12:56):
little futile at a certainpoint.
Brandon Mulnix (12:58):
But well, as I've learned from you and the
complexity of getting insurance,you've mentioned Lloyd's,
Lloyd's of London, you'vementioned I mean we've talked
about Bermuda in the past andall of the different markets
that you have to shop a farm tobasically to get insurance
because you said authoritycarriers might carry a plan.
(13:19):
I'm glad there's administratorsthat can handle how to navigate
all that.
But in your time, you've seensome best practices come to
light.
Your time on UEP, your time inthe industry, being down on the
farms.
From your experience, what aresome of the non-negotiable best
practices for fire prevention inthe poultry houses that
(13:40):
underwriters are demanding tosee today?
Brett Cohrs (13:44):
Yeah.
The things that they want tosee are electrical maintenance.
So infrared scanning has been arequirement since I've been in
the industry.
So for at least 10 years, Idon't know that it predates me
by quite a few years.
So annual infrared scanning ofuh all your electrical boxes.
(14:06):
A lot of insurers would preferscanning of other motors and um
anything that could potentiallycause a uh spark, cause a fire.
So infrared scanning separationnow is moved from 50 feet to
100 feet.
They will make some allowanceif there's no other way to do it
except for 80 feet, 75 feet,but pricing will sometimes be
(14:30):
reflected in that.
So at least 100 feet, firewallsin the egg corridors between
the houses.
Um, we've anecdotally heard andseen that fires, if they've
spread a lot of times frombuilding to building, it's
wind-driven.
It doesn't make it through thecorridors when the fire doors,
two hours, fire doors, and theuh firewalls are there.
(14:50):
Firewalls in the processingfacility, this one is one that's
kind of gotten lost in theshuffle, I think.
Um, but a new processingfacility needs to have firewalls
between the processing area,the packing area, the cleaning,
grading area, and the uh drystorage.
Those are fire separation, theinfrared scanning and electrical
maintenance.
(15:10):
A lot of times we'll they willask about electrical updates or
if there's been electricalinspection.
So typically electrical firesare the source of most of our
incidences.
So those are those are the mainones.
I know that wasn't a long list.
Underwriting, we'll go intoother details, but those are the
ones that have been the classicrequirements.
Brandon Mulnix (15:31):
Leaders have to kind of put all this together in
a submittal.
What are some of the bestpractices when it comes to that
submittal that leaders should beaware of?
Brett Cohrs (15:43):
The markets really look at three or four things in
a submission.
One of the main ones isvaluation.
Um, the the value of the realproperty needs to somewhat stay
in line with inflation andexpectation there.
Uh, the last thing, somepolicies in the past, and
(16:03):
there's a chance it might bemoving back in this direction,
there have been blanketcoverages for all the buildings
at a site, or possibly even allthe buildings across the whole
operation, blanket coverage foreverything.
And if you know you have a $15million building that you insure
for $8 million because you knowyou have a, you know, $100
million blanket or whatever, youfigure your worst loss will be
(16:26):
covered.
In the past, when that hashappened, that has caused a lot
of heartache in the industry,which is could be one of the
reasons get folks likeNationwide left the business.
They weren't getting thepremium for the values that they
had insured.
Having some sort of story andbackup for your valuation of
your real property is is a veryimportant piece.
(16:47):
And having a pretty good storyfor your business interruption
value, which we all know howdifficult that is to pin down
for egg producers given thevolatility of the egg market.
But it is something that needsto be addressed clearly with a
decent score.
And really, from a riskmanagement standpoint, if you
know how your coverage is,that's one of the most important
(17:09):
things because somebody who'sbeen through a fire needs to go
buy eggs to replace them, that'suh that can be a heavy expense
if the market's going haywire onyou.
So that's one thing, valuation,all your this fire separation
piece is important.
So um, from the standpoint ofwhat the separation is and what
(17:31):
your contingency plan is, whereyou it might not be ideal.
So, how would you help keepfire from spreading on your
farm?
So loft control items andhousekeeping that gets lost in
the shuffle a lot of times.
We'll be talking to an insuredand then also they'll
offhandedly say something like,our motor protectors do that.
Like, what is what's a motorprotector?
(17:53):
You know, when we're talkingabout, you know, maybe an
electrical system that monitorsthe, you know, the current draw
by a particular motor.
And then, well, our motorprotectors, oh, yeah, motor
protectors, tell me how thosework.
So sometimes producers don'tthink about the things that are
actual risk mitigationcomponents to their operation.
(18:14):
So I think one of the biggestthings is to do a thorough
review of anything you're doingthat could touch risk
management.
If you have a preventativemaintenance program, um, maybe
some software that withreminders that you can put in
things like fire extinguisherchecks and things like that.
So stuff like that, that youjust gotta mine your operation
(18:36):
from the standpoint of dig forthe information that that helps
them see that you have a lot ofthese practices in place
already.
It could be just the water youswim in, the air you breathe.
You don't even realize thatit's a compelling story for
underwriters.
So find where you're doing someof those basic housekeeping
things.
And then um right now with thetechnologies that are out there,
(18:57):
it's very important that aproducer is investigating and
researching those things andhaving conversations with folks
like Prism, you know, with Thermand some of the other
technologies that are out therethat have different uses from a
risk management standpoint.
So to be able to share thatstory because electrical,
(19:17):
long-winded answer here, but Iwould say that we we always want
to touch on how you're handlingyour electrical, how you're
monitoring and and and managingyour maintenance on your
electrical, um, and how new itis, how you're managing your
manure because spontaneouscombustion, where where's that?
So we always want to addresselectrical practices, manure
(19:39):
practices, separation,contingent response.
So, what kind of wateravailability is there?
Have you talked to your umVolature fire departments or
other fire departments?
And what are yourcontingencies?
So, how do you handle a all theway from spare parts to how
quickly can you get a newgrader?
How long will you have to beout if you do have a loss?
(20:01):
So all those things areimportant to think through when
you're putting together yoursubmission.
So that was a lot.
I could bullet point it ifsomebody wanted to ask me, but
uh it's evaluation, loss controlpractices, technology, and
response.
Brandon Mulnix (20:17):
It's a lot of work to prepare those.
I mean, there's no real easyway to explain to the
underwriters exactly what youhave unless you have a well
thought out plan.
And it's like anything else,you're selling, you're selling
your business.
All of the work that you putin, and you can imagine the
underwriters have to look atthat farm and say, man, you
(20:39):
really do value your farm.
You take care of things.
You're probably less of a riskthan somebody that is less
prepared, even in giving theirpresentation of who they are,
what their farm is doing, andthe technology and the
mitigation, you know, steps thatthey're doing.
And some of that's historicalas well.
I mean, how have they takencare of their farm in the past?
(21:00):
Are they improving on thosethings?
Do they see that investment?
Because it's you got to beattractive to the underwriters,
otherwise, you know, they theyhave a job to do and a business
to run and risk to buy into andnot.
It is, it is very interesting.
I I've learned the onion layer.
Brett Cohrs (21:17):
It's funny, being on my side, they dealing with
the various clients we've dealtwith over the years.
Most everybody does a fewthings really, really well.
So we like to hone in on thethings we they do really well
and say, listen, you know, youhave a five-year plan, have a
couple years that you'rethinking about kind of rolling
out this, that, the other thing.
Like some do really good job.
I didn't mention thismaterials.
(21:37):
Like, what kind of materialsare you are you using to build
your newer buildings?
Are you using the manure beltsthat are uh fire retardant and
um the lighting systems andthings like that?
So there's a lot that can gointo it for sure.
Brandon Mulnix (21:50):
Let's talk dollars and cents.
With deductibles continuing torise for some, as we talked
about in the way the market is,what strategies or mechanisms
can producers and farm managersimplement to handle that
increased financial retentionwithout stressing the balance
sheet?
Brett Cohrs (22:10):
Well, just make sure next time the uh market
gets up to $8, uh be long inyour production and sell a bunch
on that market and save tocover that $5 million
deductible.
That's one option.
Um I think the that's it's atough question, honestly,
because it there is uh talkingthrough it with some producers,
(22:30):
there's the I mentioned earlier,choices need to be made.
So some insureds prefer to havetheir business interruption
maybe higher than necessary justto make sure they keep clients
happy if they have a loss sothey can continue to pay those
things.
And they trust that they havegood relationships with
financial institutions, thatthey could cash flow any
(22:54):
undervaluation or the deductibleissue with their um rebuilds.
You know, a lot of this is, Ithink, uh the cash-heavy nature
of cash flow-heavy nature, Ibelieve, of an egg production
facility kind of helps lenditself to being able to make
your way through uh one of theseincidents.
(23:15):
And goodness knows with avianflu, so many people have more
experience dealing withuninsured incidents than they
ever would have wanted to andhave come out pretty strong on
the other side.
So that's not a lot of advice.
And sometimes I think maybe thethe CFO and the and they count
it, they they need to sit downand really think through it as
opposed to just saying, okay,we're saving $400,000 off our
(23:38):
insurance on one of these largeprograms by upping our
deductible another milliondollars.
We need to sit down and reallywhere is that going to come from
in the event of a of a loss andmake sure there's that, whether
it's a a line of credit or arainy day fund, a la day Ramsey
or something like that, then youthen you'll uh be able to
handle it.
The biggest concern there is onmy side is that the the right
(24:02):
people who are smart in that wayknow that they are making that
decision to take on that riskand can think through how they
will handle it should it come uhcome down to it.
Brandon Mulnix (24:15):
So I'm gonna just simplify this a little bit
in layman's terms, the way Iunderstand it.
Farmers have a choice in thedeductible or the amount of risk
that they're wanting to take onthemselves.
No different than, I guess, carinsurance.
You know, you pay a higherdeductible.
It means if something happens,you got a little lot more money
out of pocket to manage thatrisk.
For fire, for businessinterruptions, other than
(24:38):
natural events.
I mean, you there's been a lotof wind events that affect
farms.
There's been a lot of differenttypes of events that really
affect farms that are insurable.
I mean, what are some of theother types of events that
you've seen in your time thatfarmers need to be aware of to
protect their farms from?
Brett Cohrs (24:57):
We do with the price increase of property
insurance and and all thevolatility of all that, and you
know, the headline generatingevents that have happened, we
forget things like productrecall, which seem to have had
an uptick in the last couple ofyears, especially in the
(25:18):
increase of the types of farmsthat are that are more um
offline uh uh contract-basedmodels of organic or free range
and things like that with lesscontrol.
As I've my wife, my wife's abig believer in conventional
eggs because she likes the ideathat they leave the chicken and
(25:39):
basically touch wire or plasticuntil they're washed and put in
a package, and there's no asclean as you can get.
But the more these differentmodels of production sort of go
back to old school ways, but ina newer version, more hands are
touching those things.
Uh there's there's moreopportunities for situations
(26:01):
that potentially it could uh endup in a recall.
I know there was one just theother day.
Brandon Mulnix (26:05):
Well, let me interrupt you a second there,
Brett, because one of the thingsthat why farms have gone to
these dispersed farms is becausethey're trying to reduce their
risk from other types of farms,uh, you know, from HPAI and
other things.
And so it's like they make adecision to diversify, and then
some other risk like you know,comes up.
(26:28):
But no, I just I had to saythat because I've seen that from
the outside, you know, lookingin as man, they're doing such a
great job reducing the risk.
Well, then HPAI or Solomoncomes in and all of these other
factors start coming in.
So yeah, well no, you're you'reright.
Brett Cohrs (26:42):
And luckily, the the I mean, I still think that
product recall at risk isrelatively low in comparison and
probably not as devastating ashaving a three million hen
facility have to depopulate forthree months.
So I think I think itdefinitely serves a purpose.
And I think even some of thesome of the larger uh egg
producers are seeing some wisdomin in reducing their for any
(27:06):
new site, maybe not havingthree, five million, but maybe a
million or five hundredthousand or something along
those lines.
So I think uh recall and justbasic management things.
I mean, I would say with a lotof the changes going on
politically, I think uh strongmanagement liability that
includes things like employmentpractices liability.
I mean, you don't typicallythat's not super expensive.
(27:28):
And if you have an EEOC typeclaim, that's something that a
lot of producers might or mightnot worry about, but it's a it's
a um it's it is a risk.
Obviously, avian flu, nottypically insurable these days,
but the effects of avian flu onthings like business
interruption for another farm,if they did have an insurable
(27:51):
loss, can exacerbate it.
You know, if you have a a lotof birds gone and the in the and
the market goes back up tothree or four or five dollars,
then all of a sudden businessinterruption loss will um spike.
So even cyber liability is kindof becoming a thing to be
concerned about the moreconnected we are.
Again, we don't have a lot ofyou know, the traditional loss
(28:13):
of a bank and all the informatecustomer information that might
not be as big of an issue, butuh cyber extortion or taking
over the fact that maybe asystem is yeah, I don't know, in
the cloud, however it's set up,but if can somebody can access
your uh your production systemor your processing, you know,
your your your software therethat way, that could be a major
(28:35):
issue.
Those are the main kind ofinsurable types of risks that we
see out there.
But I'm amazed by thisindustry, honestly, with what
they've had to bob and weavewith and and be flexible about,
you know, from the cage-freerequirements to uh maybe we
don't care that much.
And and people don't realizethe the millions or even
(28:55):
billions of dollars that thoselaws put into motion of expense
for producers, and then thenhaving that, you know, all the
different decisions that have tobe made.
It's a it's a it's a toughlandscape.
Um it's a lot more complex thanpeople realize.
Brandon Mulnix (29:11):
Speaking of cage-free and someone that sits
on the risk side, how hascage-free affected the fire risk
for producers?
Brett Cohrs (29:24):
I think two big things is the scale of the
cage-free operations are, youknow, I mentioned earlier, going
from 80 to 120,000 bird henhouses.
And I know even when they werewhen I started back in 2015, I
was sort of on the cusp of that,these larger 300 to 500,000 hen
facilities.
(29:45):
But the the scale, so theexpense just so one loss now is
not going to be $5 million.
Typically, if it's a hen house,it's gonna be at least $20
million for one uh one loss,300,000 birds or so.
And that might be Low.
The greater requirements of thelivestock management in a
(30:07):
cage-free facility, both from aum human standpoint and from a
technological standpoint, andthe amount of electrical stuff
in those facilities to keep thebirds alive, to keep them fed
and watered.
There's just a lot more uh dustor litter.
Um, there's just more therethat can go sideways if if um if
(30:30):
things aren't set up exactlyright.
There was those are the twomain, I mean, the scale and the
and the more technology that'srequired in them, I think is a
is a big deal.
Brandon Mulnix (30:39):
You mentioned the that electrical is, you
know, the number one source offire.
Mechanical is basically thesecond.
And the fact that most of themechanical are probably caused
by electrical issues, you know,or if the electricity is not
there, it doesn't exist.
But there's so much moretechnology, so many more fans
and belts, um, motors, circuits,LED lighting is been introduced
(31:04):
into these houses as well.
And and just because it's lowvoltage doesn't mean it reduces
the risk because now youactually have lights inside the
equipment with the birds, andthat was not a a thing when it
came to conventional housing.
So there's so much more thatyou've introduced, and then you
also introduce dust, dust thatgets into all those motors, all
(31:27):
of those connections, alleverywhere.
And so the and then you havewhat's the problem with dust is
it's flammable, it's so muchmore flammable than it was when
it's you know taken out you knowhigh-rise houses where it all
went to the ground underneath,and it wasn't just kind of a wet
pile, or they tried to get itdry and they you know move it
out pretty pretty regularly.
(31:47):
And now you have compares doingthat so much more.
And so it's so interestingbecause you know, we've we've
witnessed these fires thatyou're talking about, and and so
many of them, so many of themare in cage-free facilities,
which is unexpected byproduct ofthe laws that were placed and
(32:10):
more burdensome on farmers.
And so, for all the pros thatyou know, cage free brings, it
also, you know, again, riskmanagement.
Here's another risk that showsits ugly heads.
Yeah, every once in a while.
Brett Cohrs (32:21):
It's these old houses, and I'm like, I recent
memory, there's only been onesemi-older house that I've and
it was sort of an outside forcethat caused the fire that to
happen.
But it's also required, youknow, the scale, because we try
to keep commodities at arelatively decent price for our
customers, right?
And for the end consumers, it'shard to have a reasonably small
(32:46):
or scale page-free site becauseyou kind of need that the
efficiencies.
So uh it's a trade-off.
Brandon Mulnix (32:54):
Yeah.
And I think one thing listenersmay not understand is you know,
these buildings are built tokeep the birds alive.
All of the fail safes arealways there to keep the birds
alive.
And from a control'sperspective, you know, putting
redundancy and making sure thefans turn on if the temperature
(33:16):
gets too high and the controllerfails, or air inlets open when
the temperature gets too high,or it fails open so that way the
birds have air.
That's the most interestingpart, is because what happens in
a fire, if it heats up in thatspace, more fans turn on, more
oxygen's added.
(33:37):
So in the event of aconventional house where the
manure wasn't the problembecause there wasn't this fine
flammable material spreadthrough evenly throughout the
house over everything, the fansturning on, you know, it it
increased the fires by apercentage because you got more
air coming in, but it didn'tcause basically an explosion of
(33:59):
that house and the fire spreadso quickly.
That's one of the interestingthings from a controls
perspective we've seen.
And that's where technologyadvances are coming from many,
many different providers aretrying to figure out how we can
you know keep this fromhappening.
But I guess as we as we startto um land the plane here, if
(34:20):
you could give one piece ofadvice for a new farm manager,
uh emerging leader aboutinsurance and risk risk
strategy, what would it be?
Brett Cohrs (34:31):
That is a tough one.
I mean, I my first responsewould be to try really hard to
look at risk management as apotential business building
practice, you know, as we talkedabout earlier, that you know,
just from an attitude about riskmanagement to have a positive
attitude about risk management,which sounds crazy because you
(34:53):
because most people go, hey, weneed to bottom line, improve
efficiency, have more marketshare, that kind of thing.
But looking at it as thefoundation of the operation.
And so, you know, if you're anew manager of a larger
operation and you have, youknow, sort of like you want that
financial nerd to be runningyour your your uh financial part
(35:16):
of your operation, you want therisk management nerd to be sort
of looking through youroperation to make sure that any
kind of best practices are areresearched and discovered and at
least considered, even if theycan't be implemented.
And and so I would I would justsay mine your operation for
(35:36):
what are we doing well alreadyand what can we do better at?
And um, you know, from there Iwould just straight say get your
valuation right because it willhappen.
Pretend it will happen,especially even if you're
talking that you don't want totalk to a guy like me about this
stuff, um, internally say whatwould happen if we lost houses
(36:00):
seven and eight in our operationright now or in this past year,
if we lost that back 12 monthsago, what would have been the
financial consequences to us onthat?
Do those kinds of scenariosbecause I think it'll help you
kind of open your eyes to say,oh, we would have had to buy
eggs for the last six months tomake up for our XYZ contract.
(36:21):
Oh crap, it would have cost usX to produce those eggs, it
would have cost us X to buy.
That's a three, four dollardifference.
Could we have muddled throughwith what we have currently in
place?
So stuff like that, I think, isum you know, I know that was
one wasn't one piece of advice,but prioritize it, mind your
organization, and um, I wouldsay do some do some thoughtful
(36:44):
scenario playing out.
Brandon Mulnix (36:46):
Brett, I really want to thank you.
This has been very insightfulto me.
I love having conversationsabout this topic.
It's it's one of those areasthat you know people take for
granted, but uh the the betteryou handle and manage your risk,
the the more sustainable youwill be in the future as a farm.
(37:08):
And so just helping usunderstand is the topic has been
great.
Brett Cohrs (37:13):
Um, how can people reach out to you to for more
information regarding this,whether it's from the UEP
guidelines and standards or um Ido want to mention really
quick, Brandon, just not to notto uh your horn on your behalf,
but I I actually you came up ina conversation the other day
with somebody and I and and Isaid, what I love about Brandon
is he has a heart for thisindustry.
(37:35):
And regardless, um, Iappreciate the fact that you
know, just everything you do in,you know, and then it's the
technology uh therm.
Again, I it's one of thosetechnologies that I encourage
all my clients to look into, um,at least research, have those
conversations because you'retrying to figure out uh ways to
(37:57):
help protect a house, helpprotect a barn, uh location, you
know, in that in that order totry to uh so I appreciate
everything you do for theindustry, that is my point
there.
To find me, Brett.
Uh if you look, if you Googlemy name, I think I'm the only
one in the world.
So C-O-H-R-S, Brett Kors,you'll you'll find me um
(38:19):
LinkedIn.
Um I'm I pop in there mostdays, but our uh website is
palomarins.com,P-A-L-O-M-A-R-I-N S.com.
And it's just my first name andlast initial for my email
address.
But yeah, just uh if you'vebeen in the industry very long,
you probably know somebody whoknows me, if nothing else.
So be happy to chat withanybody.
(38:40):
And I love talking to peoplewho aren't my clients because I
can not that I don't shootstraight with the other ones,
but I can we can have a realfrank early conversation and be
happy to give you my mostobnoxious advice to help you uh
help you out with these things.
Brandon Mulnix (38:55):
I'm sure the listeners really appreciate
that.
And thank you for your yourkind words as well.
So, listeners, um, yeah, welearned a lot about insurance
today.
How important it is to have acommitment towards risk
mitigation stewardship.
What are you gonna take fromthis that you can take back to
(39:16):
your business, your your crew,and start looking at risk
differently?
And if you don't have an answerto that, don't hesitate.
Reach out to me, reach out toBrett.
We'd love to be able to helpyou, help guide you.
It's amazing the amount ofknowledge and experience that
we've gained.
Um, at least I can speak formyself, as be going around the
(39:38):
different farms and seeing themitigation strategies that are
in place that make sense.
There are a lot of things thatjust don't make sense in the
world that we that is done tomitigate risk.
And I'd love to help save yousome money on um not spending
money on things that are justsnake oil in the industry when
it comes to that.
(39:58):
So, anyways, I have to I haveto give a huge shout out to
Prism Controls on this one.
This episode of the PoultryLeadership Podcast it would not
be possible without them.
I mean, we've been talkingabout fire risk, and that's
where Prism Controls, therm,detect, and respond come in.
This is a product that wasdeveloped in this industry for
(40:21):
this industry.
There's a lot of science thatwent into it from outside
industries and what worked, butwe understand what goes on in
the chicken barn.
And so, as Brett told us aboutthe best operations,
demonstrate, you know, thesuperior risk management.
Therm Detect is going to helpyou become the hero by providing
that sensor that helps makethose early decisions inside the
(40:45):
house before you ever get achance to make them.
Things that would save yourbarn immediately upon detecting
such an event and just allow youto have a future.
And who doesn't want to makesure that they can sleep at
night knowing that their houseis protected, that their farmers
(41:05):
have a place to come back totomorrow?
Thank you, Prism Controls.
Um, you can reach out to meabout that product.
It is one of my favorite,absolute favorite products that
I've ever been part of.
I never want to see anotherchicken house burn down in my
lifetime.
I've happened to see a numberof them.
And it just tears my heart whenknowing that there's technology
(41:28):
that can can absolutely umprotect your flocks.
Um, so with that, thank you,Prism Controls, um, for
sponsoring this podcast.
And like I say every week,thank you for tuning in.
This podcast is not possiblewithout you.
It's not possible without you.
Thanking me from sending meemails, showing up at trade
(41:49):
shows, and just telling me allabout the um what information
that you're gleaning from.
So please subscribe to thispodcast if you're not.
Share this podcast with youwith with your team.
If you're not the guy makinginsurance decisions, share it
with your insurance guy.
Um, I'm sure he wouldappreciate it because there's
still a lot of people that don'tknow about the technology
(42:09):
that's out there or what goesinto making a good a good plan
to save money on insurance ormitigate your your cost of
insurance in a rising market.
So yeah, catch you next time onthe Poultry Leadership Podcast.
Hey, Poultry Leadership Podcast.
Before we dive into thisepisode, I want to make sure
that it's very, very clear.
At no point are we going to betalking about actual insurance
rates.
We're not going to be talkingabout actual this will get you
this or anything like that.
So I have to be a disclaimerthere because this topic we're
talking about today is very,very sensitive to your specific
(00:24):
farm, your specific needs.
And if you have any questionsabout that, please don't
hesitate to reach out to me.
If we say something that youquestion or anything like that,
please reach out to me and I'llmake sure we correct it.
But yeah, this is for generaladvice and general knowledge
because every farm is different.
If there's one thing everypoultry business leader is
(01:18):
grappling with right now, it'sthe rising cost and complexity
of risk and insurance.
Today, we have one of the mostdefinitive experts in the field.
He is Brett Cohrs, CRM, SeniorVice President with Palomar
Insurance, the endorsed brokerfor the United Egg Producers.
Brett works every day at theintersection of operational risk
(01:42):
and financial protection,helping producers navigate a
challenging market.
Brett, welcome to the show.
Thank you for having me.
Before we dive into the nutsand bolts of the market, could
you briefly share yourbackground and how you came to
specialize in this unique riskchallenges of the poultry and
egg section?
Brett Cohrs (02:00):
Uh yeah, it's an interesting journey, I would, I
would say, by education, Englishmajor, uh, went into ministry
seminary degree, and thensomehow found myself as an
insurance agent in a uh agencyhere in the Atlanta area.
Spent about 10 to 15 years as ageneralist till uh Palomar
(02:22):
found me.
I came to work for them workingon the with the UEP team of uh
some of the old poultry guys,might remember Des Jan and
Carolyn Grubal, my predecessors,who really are the second
generation of the work in theegg industry that Palomar has
been a part of.
So I I came on as their what wecall a marketer in the
(02:43):
insurance world, which basicallymeans the person who helps
place the coverage for ourclients.
And uh, so I really got a quickeducation on how to put some of
these programs together andwhat the facilities were like.
But I didn't have a farmbackground or anything like
that.
I was just a a uh a curiousmind and um and an insurance guy
(03:05):
who just enjoyed learning a newindustry, and it's it's been a
blast.
Well, you've lived in theAtlanta area for a while.
Tell us a little bit about yourfamily.
Sure.
I uh just celebrated our 20thuh wedding anniversary in May.
I have two kids, 17-year-oldtwin boys and uh 18-year-old
(03:26):
daughter.
They're about you know Irishriplets, I suppose, about 18
months apart, close to it.
Uh my daughter's uh her firstyear in college this year, so
we're uh pretty soon we'll beempty nesters, I suppose.
So just been here really mywhole life, grew up in the
Atlanta area, metro area when Iwent away for college and some
jobs, but I've been back heresince uh about 2020.
(03:47):
Excellent.
Brandon Mulnix (03:48):
Well, let's dive right into some things here,
Brett.
What are two to three majorshifts that you've seen in the
insurance market lately, likerising rates, limited carrier
options, or increasingdeductibles that should keep an
up-and-coming leader up atnight?
Sure.
Brett Cohrs (04:06):
It's been a crazy 10 years since I've been in
here.
We've I've I've seen what feelslike a full insurance cycle,
which in our world might meanrates that were sort of low.
And over the really what mostpeople have experienced the last
probably seven or eight years,probably since 2017, 2018, is uh
(04:27):
steadily increasing rates for avariety of reasons.
At this very juncture, therates, the trend right now is
for rates to be going down forour larger egg producers, the
ones who have found themselvesin those layered property
program structures, havemultiple carriers from anywhere
from 10 to 40 carriers on theirprogram.
(04:50):
For those types of insureds,rates should be going down,
barring a very recent claim,even if the very recent claim be
mitigated by the wholemacroeconomic forces that are
causing insurance rates to godown for everybody in the large
property sector.
(05:11):
That being said, rates arestill going up for smaller
producers, contract farmers,anybody who has maybe less than
100 million in values, who mighthave been with a nationwide
agribusiness or a Westfield orone of those types of carriers.
Those carriers are stilltightening their appetite.
So those, a lot of thoseoperations are finding
(05:32):
themselves in those Lloydprograms or what we call the
excess and surplus linesmarkets.
So for them, rates are goingup.
And everybody still wouldprobably say, even if rates come
down a little bit this year,their percentage of spend on
their insurance is much higherthan it was seven, eight years
ago, three years ago, even fouryears ago.
(05:53):
And it's, you know, maybe alittle bit like the egg market,
probably never going to go backdown to 88 cents for a dozen.
But um some relief is in sightright now, as long as folks have
been keeping up with the riskmanagement commitments and their
uh lock protocols.
Um, so that's the biggest one.
I mean, softening rates havebeen going up steadily for five
(06:15):
years, a little softening rightnow.
Deductibles, part of that, atdeductibles, some of these uh
clients that when I started,they might have had a $50,000 or
$100,000 deductible.
Now they have a $5 milliondeductible.
So there's a lot of riskretention and these just choices
that folks have to make.
You know, that could be a swingin three or four hundred
(06:35):
thousand dollars in premium, um,which is a guaranteed cash in
the pocket or ability to buyhigher limits due to the
increased scale.
So a lot of some of thesechoices have to be made when
they want to make sure we wecover the big loss.
So those deductible choices,even some coverage choices.
Some insureds are deciding, youknow, we're just not going to
(06:56):
cover this group of buildingsanymore.
They're we've depreciated themoff our balance sheet, no big
deal.
We wouldn't build back the sameanyway.
We're just gonna leave thoseoff as a cost-saving technique.
So a lot of deductible choicesversus back in the day when you
just buy a policy and you assumeeverything's covered really
easily.
You really have to look at whatyou're getting.
I would say the third big trendright now, especially it
(07:18):
relates to poultry, istechnology, the increased
importance of using technologyas a risk management tool from
infrared scanning and otherthings that we can we can talk
about uh a little bit later.
But just the there's a goodneed for whether it's
construction materials, fire,fire mitigation, both from uh
(07:38):
availability of water andbuilding wells and things like
that to have that on site toother things.
So just being aware oftechnology, just a just a
greater, I feel like it's a muchsmarter technologically minded
risk manager now that are thatare starting to uh run these
programs.
Brandon Mulnix (07:56):
You mentioned a lot of different, what I'm gonna
say, high-level people orhigh-level topics that, you
know, in a typical farm, it'sowner, it's less likely going to
be the operator that has toworry about these things.
But when it comes to richmanagement stewardship, why is
that important as a coreleadership competency to
(08:19):
understand risk?
And I guess that extendsoutside of just the layer
industry, too, to any business.
Why is it important for leadersto understand risk?
Brett Cohrs (08:27):
It's a good question.
And I wish more businesseswould ask it because risk
management or insurance,especially, is typically seen as
an expense.
It is an expense.
It's not something that thatimproves the bottom line
necessarily.
It steals from the bottom linein a lot of minds.
But my experience over my last23 or 24 years in the insurance
(08:51):
industry overall has been thebest run businesses from a risk
management standpoint seem to bethe businesses that have the
best overtime profitability.
I've worked with a lot ofnonprofits, the best run from a
risk management, the ones whohave all the background checks
in place and the vehicle checksin place, and the you know how
(09:12):
they allow people to work withthe kids in their nonprofit and
things like that.
The ones who have the bestpractices always have the best
donor relationships, and you'llslowly find them taking over,
not taking over, but maybeabsorbing another nonprofit that
might not be as well run fromsome of those standpoints.
And I think we sometimes seethat in the egg industry.
(09:34):
So, as a risk management, asthe stewardship of being on the
cutting edge from a riskmanagement standpoint, checking
into materials, experimentingwith technologies, doing all of
these things.
The ones who seem to be doingthings like that are also the
producers that we often seegrowing one way or the other.
(09:56):
So I think it it's a it's acultural thing.
So from a leadershipstandpoint, I mean, that's sort
of what I see, the symptoms, butinternally I feel like the ones
that are monitoring thesethings, I think it gives
employees more confidence thatthis place is going to be here
for the long haul, that they'respending money that they're not
(10:17):
directly seeing a return on forsafety and for the protection of
the animals, or just to honorcommitments they've made, maybe
to an insurer or to thecommunity around them.
So it could, it can fit in anumber of different categories.
You know, in uh installing asprinkler system is not just
(10:37):
good to convince a carrier, butit also is life safety for
employees if if somethinghappens.
So there's all, you know, in aprocessing facility, I don't
expect a whole lot of sprinklersin uh layer barns or anything
like that.
But so I think from a from fromthat standpoint, uh it seems to
build a long-term successfulorganization if risk management
(11:00):
is at least considered apriority and not a annoyance.
Hopefully that answered thequestion.
Brandon Mulnix (11:07):
But I think it's that's really well said because
I think risk management is partof a company's sustainability
plan.
Are they gonna be around?
Are they gonna not just forthemselves, but are they gonna
be around for their community?
Are they around for theiremployees?
Are they gonna be contributingto the welfare of that
community?
I know a lot of these producersin the industry are probably
(11:30):
the largest employer in theirarea, sometimes in their county.
And so when they have an issue,it affects jobs, it affects the
local grocery store if peopledon't have money to spend.
And it really does, and I Ilove the way our our industry
gives back to their communities,but this is one of those things
(11:50):
that if they have a fire, itreally does tax the community a
lot.
If they have to buildinfrastructure, let's say, for
water, uh, a water tower orsomething, that's something that
some producers end up utilizingfor the community as well.
It's it's not just a, hey,we're building it for us, but
we're actually building it forour community.
(12:10):
So the money is well spent inthat area.
It's just hard to spend becauseit's not an emergency.
You're building on your future.
And and how many of us like tospend that money that says, hey,
this might happen.
Let's let's just take, youknow, let's just kind of put
Murphy as in Murphy's Law out ofbusiness, or they're gonna
they're gonna come and it'sgonna be a bad day when I don't
(12:32):
do it.
Brett Cohrs (12:33):
Yeah, same principle of, you know, you're
building a building a house, youknow, you you can you can make
the most gorgeous, beautifulhouse with the beautiful
interior layout and fixtures andall that.
And if the if the if thefoundation is bad, not up to
code, and then all of a suddenyou see that crack happen in the
wall, you know, it it renderseverything else you're doing a
(12:56):
little futile at a certainpoint.
Brandon Mulnix (12:58):
But well, as I've learned from you and the
complexity of getting insurance,you've mentioned Lloyd's,
Lloyd's of London, you'vementioned I mean we've talked
about Bermuda in the past andall of the different markets
that you have to shop a farm tobasically to get insurance
because you said authoritycarriers might carry a plan.
(13:19):
I'm glad there's administratorsthat can handle how to navigate
all that.
But in your time, you've seensome best practices come to
light.
Your time on UEP, your time inthe industry, being down on the
farms.
From your experience, what aresome of the non-negotiable best
practices for fire prevention inthe poultry houses that
(13:40):
underwriters are demanding tosee today?
Brett Cohrs (13:44):
Yeah.
The things that they want tosee are electrical maintenance.
So infrared scanning has been arequirement since I've been in
the industry.
So for at least 10 years, Idon't know that it predates me
by quite a few years.
So annual infrared scanning ofuh all your electrical boxes.
(14:06):
A lot of insurers would preferscanning of other motors and um
anything that could potentiallycause a uh spark, cause a fire.
So infrared scanning separationnow is moved from 50 feet to
100 feet.
They will make some allowanceif there's no other way to do it
except for 80 feet, 75 feet,but pricing will sometimes be
(14:30):
reflected in that.
So at least 100 feet, firewallsin the egg corridors between
the houses.
Um, we've anecdotally heard andseen that fires, if they've
spread a lot of times frombuilding to building, it's
wind-driven.
It doesn't make it through thecorridors when the fire doors,
two hours, fire doors, and theuh firewalls are there.
(14:50):
Firewalls in the processingfacility, this one is one that's
kind of gotten lost in theshuffle, I think.
Um, but a new processingfacility needs to have firewalls
between the processing area,the packing area, the cleaning,
grading area, and the uh drystorage.
Those are fire separation, theinfrared scanning and electrical
maintenance.
(15:10):
A lot of times we'll they willask about electrical updates or
if there's been electricalinspection.
So typically electrical firesare the source of most of our
incidences.
So those are those are the mainones.
I know that wasn't a long list.
Underwriting, we'll go intoother details, but those are the
ones that have been the classicrequirements.
Brandon Mulnix (15:31):
Leaders have to kind of put all this together in
a submittal.
What are some of the bestpractices when it comes to that
submittal that leaders should beaware of?
Brett Cohrs (15:43):
The markets really look at three or four things in
a submission.
One of the main ones isvaluation.
Um, the the value of the realproperty needs to somewhat stay
in line with inflation andexpectation there.
Uh, the last thing, somepolicies in the past, and
(16:03):
there's a chance it might bemoving back in this direction,
there have been blanketcoverages for all the buildings
at a site, or possibly even allthe buildings across the whole
operation, blanket coverage foreverything.
And if you know you have a $15million building that you insure
for $8 million because you knowyou have a, you know, $100
million blanket or whatever, youfigure your worst loss will be
(16:26):
covered.
In the past, when that hashappened, that has caused a lot
of heartache in the industry,which is could be one of the
reasons get folks likeNationwide left the business.
They weren't getting thepremium for the values that they
had insured.
Having some sort of story andbackup for your valuation of
your real property is is a veryimportant piece.
(16:47):
And having a pretty good storyfor your business interruption
value, which we all know howdifficult that is to pin down
for egg producers given thevolatility of the egg market.
But it is something that needsto be addressed clearly with a
decent score.
And really, from a riskmanagement standpoint, if you
know how your coverage is,that's one of the most important
(17:09):
things because somebody who'sbeen through a fire needs to go
buy eggs to replace them, that'suh that can be a heavy expense
if the market's going haywire onyou.
So that's one thing, valuation,all your this fire separation
piece is important.
So um, from the standpoint ofwhat the separation is and what
(17:31):
your contingency plan is, whereyou it might not be ideal.
So, how would you help keepfire from spreading on your
farm?
So loft control items andhousekeeping that gets lost in
the shuffle a lot of times.
We'll be talking to an insuredand then also they'll
offhandedly say something like,our motor protectors do that.
Like, what is what's a motorprotector?
(17:53):
You know, when we're talkingabout, you know, maybe an
electrical system that monitorsthe, you know, the current draw
by a particular motor.
And then, well, our motorprotectors, oh, yeah, motor
protectors, tell me how thosework.
So sometimes producers don'tthink about the things that are
actual risk mitigationcomponents to their operation.
(18:14):
So I think one of the biggestthings is to do a thorough
review of anything you're doingthat could touch risk
management.
If you have a preventativemaintenance program, um, maybe
some software that withreminders that you can put in
things like fire extinguisherchecks and things like that.
So stuff like that, that youjust gotta mine your operation
(18:36):
from the standpoint of dig forthe information that that helps
them see that you have a lot ofthese practices in place
already.
It could be just the water youswim in, the air you breathe.
You don't even realize thatit's a compelling story for
underwriters.
So find where you're doing someof those basic housekeeping
things.
And then um right now with thetechnologies that are out there,
(18:57):
it's very important that aproducer is investigating and
researching those things andhaving conversations with folks
like Prism, you know, with Thermand some of the other
technologies that are out therethat have different uses from a
risk management standpoint.
So to be able to share thatstory because electrical,
(19:17):
long-winded answer here, but Iwould say that we we always want
to touch on how you're handlingyour electrical, how you're
monitoring and and and managingyour maintenance on your
electrical, um, and how new itis, how you're managing your
manure because spontaneouscombustion, where where's that?
So we always want to addresselectrical practices, manure
(19:39):
practices, separation,contingent response.
So, what kind of wateravailability is there?
Have you talked to your umVolature fire departments or
other fire departments?
And what are yourcontingencies?
So, how do you handle a all theway from spare parts to how
quickly can you get a newgrader?
How long will you have to beout if you do have a loss?
(20:01):
So all those things areimportant to think through when
you're putting together yoursubmission.
So that was a lot.
I could bullet point it ifsomebody wanted to ask me, but
uh it's evaluation, loss controlpractices, technology, and
response.
Brandon Mulnix (20:17):
It's a lot of work to prepare those.
I mean, there's no real easyway to explain to the
underwriters exactly what youhave unless you have a well
thought out plan.
And it's like anything else,you're selling, you're selling
your business.
All of the work that you putin, and you can imagine the
underwriters have to look atthat farm and say, man, you
(20:39):
really do value your farm.
You take care of things.
You're probably less of a riskthan somebody that is less
prepared, even in giving theirpresentation of who they are,
what their farm is doing, andthe technology and the
mitigation, you know, steps thatthey're doing.
And some of that's historicalas well.
I mean, how have they takencare of their farm in the past?
(21:00):
Are they improving on thosethings?
Do they see that investment?
Because it's you got to beattractive to the underwriters,
otherwise, you know, they theyhave a job to do and a business
to run and risk to buy into andnot.
It is, it is very interesting.
I I've learned the onion layer.
Brett Cohrs (21:17):
It's funny, being on my side, they dealing with
the various clients we've dealtwith over the years.
Most everybody does a fewthings really, really well.
So we like to hone in on thethings we they do really well
and say, listen, you know, youhave a five-year plan, have a
couple years that you'rethinking about kind of rolling
out this, that, the other thing.
Like some do really good job.
I didn't mention thismaterials.
(21:37):
Like, what kind of materialsare you are you using to build
your newer buildings?
Are you using the manure beltsthat are uh fire retardant and
um the lighting systems andthings like that?
So there's a lot that can gointo it for sure.
Brandon Mulnix (21:50):
Let's talk dollars and cents.
With deductibles continuing torise for some, as we talked
about in the way the market is,what strategies or mechanisms
can producers and farm managersimplement to handle that
increased financial retentionwithout stressing the balance
sheet?
Brett Cohrs (22:10):
Well, just make sure next time the uh market
gets up to $8, uh be long inyour production and sell a bunch
on that market and save tocover that $5 million
deductible.
That's one option.
Um I think the that's it's atough question, honestly,
because it there is uh talkingthrough it with some producers,
(22:30):
there's the I mentioned earlier,choices need to be made.
So some insureds prefer to havetheir business interruption
maybe higher than necessary justto make sure they keep clients
happy if they have a loss sothey can continue to pay those
things.
And they trust that they havegood relationships with
financial institutions, thatthey could cash flow any
(22:54):
undervaluation or the deductibleissue with their um rebuilds.
You know, a lot of this is, Ithink, uh the cash-heavy nature
of cash flow-heavy nature, Ibelieve, of an egg production
facility kind of helps lenditself to being able to make
your way through uh one of theseincidents.
(23:15):
And goodness knows with avianflu, so many people have more
experience dealing withuninsured incidents than they
ever would have wanted to andhave come out pretty strong on
the other side.
So that's not a lot of advice.
And sometimes I think maybe thethe CFO and the and they count
it, they they need to sit downand really think through it as
opposed to just saying, okay,we're saving $400,000 off our
(23:38):
insurance on one of these largeprograms by upping our
deductible another milliondollars.
We need to sit down and reallywhere is that going to come from
in the event of a of a loss andmake sure there's that, whether
it's a a line of credit or arainy day fund, a la day Ramsey
or something like that, then youthen you'll uh be able to
handle it.
The biggest concern there is onmy side is that the the right
(24:02):
people who are smart in that wayknow that they are making that
decision to take on that riskand can think through how they
will handle it should it come uhcome down to it.
Brandon Mulnix (24:15):
So I'm gonna just simplify this a little bit
in layman's terms, the way Iunderstand it.
Farmers have a choice in thedeductible or the amount of risk
that they're wanting to take onthemselves.
No different than, I guess, carinsurance.
You know, you pay a higherdeductible.
It means if something happens,you got a little lot more money
out of pocket to manage thatrisk.
For fire, for businessinterruptions, other than
(24:38):
natural events.
I mean, you there's been a lotof wind events that affect
farms.
There's been a lot of differenttypes of events that really
affect farms that are insurable.
I mean, what are some of theother types of events that
you've seen in your time thatfarmers need to be aware of to
protect their farms from?
Brett Cohrs (24:57):
We do with the price increase of property
insurance and and all thevolatility of all that, and you
know, the headline generatingevents that have happened, we
forget things like productrecall, which seem to have had
an uptick in the last couple ofyears, especially in the
(25:18):
increase of the types of farmsthat are that are more um
offline uh uh contract-basedmodels of organic or free range
and things like that with lesscontrol.
As I've my wife, my wife's abig believer in conventional
eggs because she likes the ideathat they leave the chicken and
(25:39):
basically touch wire or plasticuntil they're washed and put in
a package, and there's no asclean as you can get.
But the more these differentmodels of production sort of go
back to old school ways, but ina newer version, more hands are
touching those things.
Uh there's there's moreopportunities for situations
(26:01):
that potentially it could uh endup in a recall.
I know there was one just theother day.
Brandon Mulnix (26:05):
Well, let me interrupt you a second there,
Brett, because one of the thingsthat why farms have gone to
these dispersed farms is becausethey're trying to reduce their
risk from other types of farms,uh, you know, from HPAI and
other things.
And so it's like they make adecision to diversify, and then
some other risk like you know,comes up.
(26:28):
But no, I just I had to saythat because I've seen that from
the outside, you know, lookingin as man, they're doing such a
great job reducing the risk.
Well, then HPAI or Solomoncomes in and all of these other
factors start coming in.
So yeah, well no, you're you'reright.
Brett Cohrs (26:42):
And luckily, the the I mean, I still think that
product recall at risk isrelatively low in comparison and
probably not as devastating ashaving a three million hen
facility have to depopulate forthree months.
So I think I think itdefinitely serves a purpose.
And I think even some of thesome of the larger uh egg
producers are seeing some wisdomin in reducing their for any
(27:06):
new site, maybe not havingthree, five million, but maybe a
million or five hundredthousand or something along
those lines.
So I think uh recall and justbasic management things.
I mean, I would say with a lotof the changes going on
politically, I think uh strongmanagement liability that
includes things like employmentpractices liability.
I mean, you don't typicallythat's not super expensive.
(27:28):
And if you have an EEOC typeclaim, that's something that a
lot of producers might or mightnot worry about, but it's a it's
a um it's it is a risk.
Obviously, avian flu, nottypically insurable these days,
but the effects of avian flu onthings like business
interruption for another farm,if they did have an insurable
(27:51):
loss, can exacerbate it.
You know, if you have a a lotof birds gone and the in the and
the market goes back up tothree or four or five dollars,
then all of a sudden businessinterruption loss will um spike.
So even cyber liability is kindof becoming a thing to be
concerned about the moreconnected we are.
Again, we don't have a lot ofyou know, the traditional loss
(28:13):
of a bank and all the informatecustomer information that might
not be as big of an issue, butuh cyber extortion or taking
over the fact that maybe asystem is yeah, I don't know, in
the cloud, however it's set up,but if can somebody can access
your uh your production systemor your processing, you know,
your your your software therethat way, that could be a major
(28:35):
issue.
Those are the main kind ofinsurable types of risks that we
see out there.
But I'm amazed by thisindustry, honestly, with what
they've had to bob and weavewith and and be flexible about,
you know, from the cage-freerequirements to uh maybe we
don't care that much.
And and people don't realizethe the millions or even
(28:55):
billions of dollars that thoselaws put into motion of expense
for producers, and then thenhaving that, you know, all the
different decisions that have tobe made.
It's a it's a it's a toughlandscape.
Um it's a lot more complex thanpeople realize.
Brandon Mulnix (29:11):
Speaking of cage-free and someone that sits
on the risk side, how hascage-free affected the fire risk
for producers?
Brett Cohrs (29:24):
I think two big things is the scale of the
cage-free operations are, youknow, I mentioned earlier, going
from 80 to 120,000 bird henhouses.
And I know even when they werewhen I started back in 2015, I
was sort of on the cusp of that,these larger 300 to 500,000 hen
facilities.
(29:45):
But the the scale, so theexpense just so one loss now is
not going to be $5 million.
Typically, if it's a hen house,it's gonna be at least $20
million for one uh one loss,300,000 birds or so.
And that might be Low.
The greater requirements of thelivestock management in a
(30:07):
cage-free facility, both from aum human standpoint and from a
technological standpoint, andthe amount of electrical stuff
in those facilities to keep thebirds alive, to keep them fed
and watered.
There's just a lot more uh dustor litter.
Um, there's just more therethat can go sideways if if um if
(30:30):
things aren't set up exactlyright.
There was those are the twomain, I mean, the scale and the
and the more technology that'srequired in them, I think is a
is a big deal.
Brandon Mulnix (30:39):
You mentioned the that electrical is, you
know, the number one source offire.
Mechanical is basically thesecond.
And the fact that most of themechanical are probably caused
by electrical issues, you know,or if the electricity is not
there, it doesn't exist.
But there's so much moretechnology, so many more fans
and belts, um, motors, circuits,LED lighting is been introduced
(31:04):
into these houses as well.
And and just because it's lowvoltage doesn't mean it reduces
the risk because now youactually have lights inside the
equipment with the birds, andthat was not a a thing when it
came to conventional housing.
So there's so much more thatyou've introduced, and then you
also introduce dust, dust thatgets into all those motors, all
(31:27):
of those connections, alleverywhere.
And so the and then you havewhat's the problem with dust is
it's flammable, it's so muchmore flammable than it was when
it's you know taken out you knowhigh-rise houses where it all
went to the ground underneath,and it wasn't just kind of a wet
pile, or they tried to get itdry and they you know move it
out pretty pretty regularly.
(31:47):
And now you have compares doingthat so much more.
And so it's so interestingbecause you know, we've we've
witnessed these fires thatyou're talking about, and and so
many of them, so many of themare in cage-free facilities,
which is unexpected byproduct ofthe laws that were placed and
(32:10):
more burdensome on farmers.
And so, for all the pros thatyou know, cage free brings, it
also, you know, again, riskmanagement.
Here's another risk that showsits ugly heads.
Yeah, every once in a while.
Brett Cohrs (32:21):
It's these old houses, and I'm like, I recent
memory, there's only been onesemi-older house that I've and
it was sort of an outside forcethat caused the fire that to
happen.
But it's also required, youknow, the scale, because we try
to keep commodities at arelatively decent price for our
customers, right?
And for the end consumers, it'shard to have a reasonably small
(32:46):
or scale page-free site becauseyou kind of need that the
efficiencies.
So uh it's a trade-off.
Brandon Mulnix (32:54):
Yeah.
And I think one thing listenersmay not understand is you know,
these buildings are built tokeep the birds alive.
All of the fail safes arealways there to keep the birds
alive.
And from a control'sperspective, you know, putting
redundancy and making sure thefans turn on if the temperature
(33:16):
gets too high and the controllerfails, or air inlets open when
the temperature gets too high,or it fails open so that way the
birds have air.
That's the most interestingpart, is because what happens in
a fire, if it heats up in thatspace, more fans turn on, more
oxygen's added.
(33:37):
So in the event of aconventional house where the
manure wasn't the problembecause there wasn't this fine
flammable material spreadthrough evenly throughout the
house over everything, the fansturning on, you know, it it
increased the fires by apercentage because you got more
air coming in, but it didn'tcause basically an explosion of
(33:59):
that house and the fire spreadso quickly.
That's one of the interestingthings from a controls
perspective we've seen.
And that's where technologyadvances are coming from many,
many different providers aretrying to figure out how we can
you know keep this fromhappening.
But I guess as we as we startto um land the plane here, if
(34:20):
you could give one piece ofadvice for a new farm manager,
uh emerging leader aboutinsurance and risk risk
strategy, what would it be?
Brett Cohrs (34:31):
That is a tough one.
I mean, I my first responsewould be to try really hard to
look at risk management as apotential business building
practice, you know, as we talkedabout earlier, that you know,
just from an attitude about riskmanagement to have a positive
attitude about risk management,which sounds crazy because you
(34:53):
because most people go, hey, weneed to bottom line, improve
efficiency, have more marketshare, that kind of thing.
But looking at it as thefoundation of the operation.
And so, you know, if you're anew manager of a larger
operation and you have, youknow, sort of like you want that
financial nerd to be runningyour your your uh financial part
(35:16):
of your operation, you want therisk management nerd to be sort
of looking through youroperation to make sure that any
kind of best practices are areresearched and discovered and at
least considered, even if theycan't be implemented.
And and so I would I would justsay mine your operation for
(35:36):
what are we doing well alreadyand what can we do better at?
And um, you know, from there Iwould just straight say get your
valuation right because it willhappen.
Pretend it will happen,especially even if you're
talking that you don't want totalk to a guy like me about this
stuff, um, internally say whatwould happen if we lost houses
(36:00):
seven and eight in our operationright now or in this past year,
if we lost that back 12 monthsago, what would have been the
financial consequences to us onthat?
Do those kinds of scenariosbecause I think it'll help you
kind of open your eyes to say,oh, we would have had to buy
eggs for the last six months tomake up for our XYZ contract.
(36:21):
Oh crap, it would have cost usX to produce those eggs, it
would have cost us X to buy.
That's a three, four dollardifference.
Could we have muddled throughwith what we have currently in
place?
So stuff like that, I think, isum you know, I know that was
one wasn't one piece of advice,but prioritize it, mind your
organization, and um, I wouldsay do some do some thoughtful
(36:44):
scenario playing out.
Brandon Mulnix (36:46):
Brett, I really want to thank you.
This has been very insightfulto me.
I love having conversationsabout this topic.
It's it's one of those areasthat you know people take for
granted, but uh the the betteryou handle and manage your risk,
the the more sustainable youwill be in the future as a farm.
(37:08):
And so just helping usunderstand is the topic has been
great.
Brett Cohrs (37:13):
Um, how can people reach out to you to for more
information regarding this,whether it's from the UEP
guidelines and standards or um Ido want to mention really
quick, Brandon, just not to notto uh your horn on your behalf,
but I I actually you came up ina conversation the other day
with somebody and I and and Isaid, what I love about Brandon
is he has a heart for thisindustry.
(37:35):
And regardless, um, Iappreciate the fact that you
know, just everything you do in,you know, and then it's the
technology uh therm.
Again, I it's one of thosetechnologies that I encourage
all my clients to look into, um,at least research, have those
conversations because you'retrying to figure out uh ways to
(37:57):
help protect a house, helpprotect a barn, uh location, you
know, in that in that order totry to uh so I appreciate
everything you do for theindustry, that is my point
there.
To find me, Brett.
Uh if you look, if you Googlemy name, I think I'm the only
one in the world.
So C-O-H-R-S, Brett Kors,you'll you'll find me um
(38:19):
LinkedIn.
Um I'm I pop in there mostdays, but our uh website is
palomarins.com,P-A-L-O-M-A-R-I-N S.com.
And it's just my first name andlast initial for my email
address.
But yeah, just uh if you'vebeen in the industry very long,
you probably know somebody whoknows me, if nothing else.
So be happy to chat withanybody.
(38:40):
And I love talking to peoplewho aren't my clients because I
can not that I don't shootstraight with the other ones,
but I can we can have a realfrank early conversation and be
happy to give you my mostobnoxious advice to help you uh
help you out with these things.
Brandon Mulnix (38:55):
I'm sure the listeners really appreciate
that.
And thank you for your yourkind words as well.
So, listeners, um, yeah, welearned a lot about insurance
today.
How important it is to have acommitment towards risk
mitigation stewardship.
What are you gonna take fromthis that you can take back to
(39:16):
your business, your your crew,and start looking at risk
differently?
And if you don't have an answerto that, don't hesitate.
Reach out to me, reach out toBrett.
We'd love to be able to helpyou, help guide you.
It's amazing the amount ofknowledge and experience that
we've gained.
Um, at least I can speak formyself, as be going around the
(39:38):
different farms and seeing themitigation strategies that are
in place that make sense.
There are a lot of things thatjust don't make sense in the
world that we that is done tomitigate risk.
And I'd love to help save yousome money on um not spending
money on things that are justsnake oil in the industry when
it comes to that.
(39:58):
So, anyways, I have to I haveto give a huge shout out to
Prism Controls on this one.
This episode of the PoultryLeadership Podcast it would not
be possible without them.
I mean, we've been talkingabout fire risk, and that's
where Prism Controls, therm,detect, and respond come in.
This is a product that wasdeveloped in this industry for
(40:21):
this industry.
There's a lot of science thatwent into it from outside
industries and what worked, butwe understand what goes on in
the chicken barn.
And so, as Brett told us aboutthe best operations,
demonstrate, you know, thesuperior risk management.
Therm Detect is going to helpyou become the hero by providing
that sensor that helps makethose early decisions inside the
(40:45):
house before you ever get achance to make them.
Things that would save yourbarn immediately upon detecting
such an event and just allow youto have a future.
And who doesn't want to makesure that they can sleep at
night knowing that their houseis protected, that their farmers
(41:05):
have a place to come back totomorrow?
Thank you, Prism Controls.
Um, you can reach out to meabout that product.
It is one of my favorite,absolute favorite products that
I've ever been part of.
I never want to see anotherchicken house burn down in my
lifetime.
I've happened to see a numberof them.
And it just tears my heart whenknowing that there's technology
(41:28):
that can can absolutely umprotect your flocks.
Um, so with that, thank you,Prism Controls, um, for
sponsoring this podcast.
And like I say every week,thank you for tuning in.
This podcast is not possiblewithout you.
It's not possible without you.
Thanking me from sending meemails, showing up at trade
(41:49):
shows, and just telling me allabout the um what information
that you're gleaning from.
So please subscribe to thispodcast if you're not.
Share this podcast with youwith with your team.
If you're not the guy makinginsurance decisions, share it
with your insurance guy.
Um, I'm sure he wouldappreciate it because there's
still a lot of people that don'tknow about the technology
(42:09):
that's out there or what goesinto making a good a good plan
to save money on insurance ormitigate your your cost of
insurance in a rising market.
So yeah, catch you next time onthe Poultry Leadership Podcast.
Popular Podcasts
Stuff You Should Know
If you've ever wanted to know about champagne, satanism, the Stonewall Uprising, chaos theory, LSD, El Nino, true crime and Rosa Parks, then look no further. Josh and Chuck have you covered.
The Joe Rogan Experience
The official podcast of comedian Joe Rogan.
Two Guys, Five Rings: Matt, Bowen & The Olympics
Two Guys (Bowen Yang and Matt Rogers). Five Rings (you know, from the Olympics logo). One essential podcast for the 2026 Milan-Cortina Winter Olympics. Bowen Yang (SNL, Wicked) and Matt Rogers (Palm Royale, No Good Deed) of Las Culturistas are back for a second season of Two Guys, Five Rings, a collaboration with NBC Sports and iHeartRadio. In this 15-episode event, Bowen and Matt discuss the top storylines, obsess over Italian culture, and find out what really goes on in the Olympic Village.