Wednesday, July 6, 2022

The fine print

After a sale, potential exists for a buyer to make a claim for reimbursement if a bull fails for one reason or another. Often, if it happens early enough, a breeder will lend a bull to help in this case. It is generally accepted, and usually spelled out in the terms and conditions of sale, that the animals are guaranteed for three years against anything attributable to the breeder. Obviously, impotency is one such condition, but it may be something like its feet, or blindness etc.

About 20 years ago, the council of one of the senior breeds, concerned about some insurance shortcomings, put out a recommendation that the guarantee be for three years, on the basis that if you got one year out of the bull, you should get two years’ worth of its value back. If a defect shows up before you turn the bull out, you should get a complete refund.

For instance, you might have bought a bull for $15,000 at a sale, and after the first season its feet pack up. The buyer can expect a refund of $10,000.

This recommendation has been widely accepted throughout the country, but implementation varies as to whether it is a monetary refund or credit toward the purchase of another bull from the same vendor.

While this, too, should be made clear before a sale, it’s often overlooked until it comes to a claim.

Bull failure is something every breeder dreads for the simple reason that the client is going to incur some sort of financial loss. The important thing to do here is to react quickly to minimise that loss by replacing the bull if possible.

If a claim has foundation, breeders do all sorts of things, but the most popular is offering a credit at next year’s sale.

From a commercial buyer’s point of view, the credit system probably works, because the buyer will more readily find bulls to suit his or her needs from that same stud, but it becomes murky when a stud buyer may have wanted one animal in particular from this vendor, but is now locked into spending big money on something else that might not quite suit their needs.

It really comes down to the relationship between the vendor and buyer, but it’s well worth being aware of the vendor’s policy before the sale.

Peace of mind 

Insuring the bull is up to the buyer, and they usually will be asked about this when registering before the sale.

For a relatively small amount the buyer can be covered from the fall-of-hammer for transit and 30 days after, but this is only for death of the animal.

In a pilot with Te Mania last year, FMG introduced a new breeders’ cover that saw the insurance built into the sale price of the bulls. According to FMG, the trial was well-supported and is being expanded this year. Such cover provides peace of mind for the buyer and can also enhance the attractiveness of the breeder’s offer.

Buyers considering bull insurance should look for cover to protect against death, infertility and theft.

Most take out fall-of-hammer through to 12 months, covering injury causing permanent loss of use, where the bull needs to be inspected by a vet and certified incapacitated.

With bull prices at high levels, insurance of purchase/s should be considered to avoid disappointment. At most sales agents from companies will be available to help you.

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