What type of insurance covers physical losses to actual crops?

• A. Crop Revenue Insurance
• B. Crop Yield Insurance
• C. Liability Insurance
• D. Property Insurance

Answer: (B)

Crop Yield Insurance is designed specifically to cover physical losses to the actual crops due to various perils like natural disasters, adverse weather, and other events that can significantly impact the agricultural yield. This type of insurance typically guarantees a certain level of production based on historical yield data, protecting farmers from income loss stemming from reduced crop outputs.

The primary focus of Crop Yield Insurance is on the quantity of the crop produced rather than the market price or revenue aspects. This ensures that farmers can rely on a safety net that compensates them for the loss in production, thus aiding their ability to manage financial risks associated with farming.

In contrast, other options do not provide the same level of protection for physical crop losses. Crop Revenue Insurance, for instance, focuses on the income from crops by combining yield and price coverage but does not specifically address losses related to the quantity produced. Liability Insurance primarily protects against claims resulting from injuries or damages to others, while Property Insurance is generally not tailored for crops and would cover physical losses to property rather than agricultural production assets specifically.