The National Cotton Ginners’ Association urges gins to carefully review the coverage and possible limitations of their gin stocks insurance policies.

Most gins use these policies to protect against loss while seed cotton is being converted into its finished products.

Higher cotton prices have increased gins’ liability. It is extremely important that gins take precautions to manage the risks associated with cotton prices and increased value of the various cotton products.

One pressing concern involves both the gin yard configuration and the amount of seed cotton being permitted for storage in the yard — generally limited by a set dollar value and very specific distance requirements between yards. With the increases in cotton values, these yards will need to be carefully planned.

Gin stocks insurance policies also have a total aggregate dollar amount that the insurer will pay regardless of the extent of the loss. With the increases in cotton prices and the gin’s liability for seed cotton storage, this aggregate amount also may require adjustment to address the higher risk the gin will be assuming.

Ginners should carefully review these contractual details with their insurance agents or brokers to make sure they understand and comply with all requirements.

In addition, it is crucial that gins inform growers of this increased risk and the importance of conforming to the policy’s requirements.