What is the purpose of a livestock floater in insurance?

• A. To cover losses due to natural disasters
• B. To provide coverage for livestock transported
• C. To insure equipment used on farms
• D. To cover agricultural production losses

Answer: (B)

The purpose of a livestock floater in insurance is specifically designed to provide coverage for livestock that is being transported. This type of policy protects the insured against losses that may occur while animals are in transit, whether they are being moved to a market, another farm, or any other location.

Transporting livestock can involve various risks, including accidents, injuries, or even loss due to theft during the journey. The livestock floater specifically addresses these needs by ensuring that the animals are covered during transit, thereby offering peace of mind to farmers and ranchers who may face significant financial loss without such coverage.

Other options, while relevant to agricultural insurance, do not specifically define the function of a livestock floater. For instance, coverage for losses due to natural disasters concerns broader property coverage, while insuring equipment used on farms is addressed under different market segments. Covering agricultural production losses pertains to crop insurance rather than livestock specifically. Each of these serves important roles in comprehensive agricultural insurance plans, but they do not describe the targeted purpose of a livestock floater.