For more on this part of the insurance industry:
1. visit our farm insurance page for a look at all products in this sector
2. or focus in on all of the hobby farm insurance products available on IB Markets!
Hobby farm insurance is a specialized coverage that protects small-scale farms operated for personal enjoyment rather than profit. It helps hobby farmers recover from financial setbacks caused by different risks. Examples of hobby farms include:
Hobby farms in Canada support rural economies by producing eggs, honey, and fresh produce for local markets. As small farms grow, the need for hobby farm insurance also increases.
If a small beekeeping farm in Ontario lost several hives and equipment due to a severe windstorm, insurance would cover the damaged structures. It can also replace essential equipment and compensate for lost beehives.
Without coverage, the financial strain could make it difficult to restart operations. But hobby farm insurance helps them recover quickly and continue producing honey.
More hobby farmers are using sustainable farming methods to improve soil health and biodiversity. Urban and small-scale farms are growing, which increases local food production and community involvement.
Many are also expanding into agritourism and niche markets. It aims to create new income opportunities. It also introduces risks for hobby farm insurance, including:
rising insurance costs: increased claims from severe weather events are driving up premiums
liability risks from u-pick farms: visitors may get injured, requiring strong liability coverage and risk management
cyber threats on hobby farms: hackers target farms using online platforms for sales and operations
Severe weather is damaging farm equipment and buildings which makes repair costs higher for hobby farmers. Brokers should aid clients in finding strong hobby farm insurance for weather-related losses.
Those with limited livestock, crops, or farm-related activities need this insurance:
Standard home insurance does not cover farm work, farm buildings, or equipment. Hobby farm insurance fills this gap. It seeks to protect both the farm and the owner.
Insurance companies consider these small-scale farms low-risk, with limited farming activities and no full-time commercial sales.
Most hobby farms in Canada are 10 acres or smaller, but rules vary by insurer and province.
|
Province |
Typical hobby farm size limit |
Notes |
|---|---|---|
|
Ontario |
up to 50 acres |
some insurers allow larger properties if they generate little income |
|
British Columbia |
varies by insurer |
larger farms may qualify, but zoning laws can impact operations |
|
Alberta |
more flexible size limits |
larger rural properties are common, but farm activities determine eligibility |
|
Saskatchewan |
more flexible size limits |
insurers focus on land use rather than strict acreage limits |
Size limits depend on the insurer and the type of farming activities. Always check with local insurance providers for specific hobby farm insurance options.
In Canada, a hobby farm is a small farm for personal use, not profit. The Canada Revenue Agency (CRA) generally sees it as a personal activity and not a business. Aspects include:
no tax deductions: hobby farmers cannot deduct farm costs or get business tax benefits
limited tax rules: hobby farm income is usually not taxable unless it runs like a business
profit-making farms may be businesses: if a farm tries to make money, it may be seen as a business
To count as a business, the farm must show a real chance of making money over time.
Canada does not have a set income limit for hobby farms. Any income earned must be reported on tax returns. If a farm regularly earns money, it may be seen as a business and taxed accordingly.
Coverage relies on farm size, operations, and insurer policies. Common coverage options for hobby farms include:
A broker can help make sure that the client gets the right hobby farm insurance package.
