All dog owners in England, Scotland and Wales, as of today, have to have their dogs microchipped and register the animal with a Government-compliant microchip database by the time they are eight weeks old.
Failure to comply may result in a £500 fine.
The legislation, designed to tackle irresponsible dog ownership, applies equally to farm working dogs as it does to pet animals.
The only exemptions are for certified working dogs with docked tails, which do not have to be chipped until they are 12 weeks old, or where the vet thinks microchipping would adversely affect the dog’s health.
Tim Price, rural affairs specialist for NFU Mutual said: “We’re concerned some owners of working dogs such as sheep dogs and gun dogs aren’t aware that the new legislation applies to their animals and could be caught out and face a fine.
“While microchipping farm dogs involves some expense, it may well prove to be well worth the time and trouble.
"That’s because our claims data suggests that straying is one of the main reasons for insurance claims involving working dogs – and microchipping makes it more likely that straying dogs can be traced and returned to their owners.
In addition to helping identify the owners of dogs which worry livestock, NFU Mutual hopes the new law will make it easier for lost or stolen dogs to be re-united with their owners.
In 2015, NFU Mutual also saw an increase in the cost for claims involving working dogs which had strayed or been stolen with the average claim costing £1368.
This was an increase of 6.3 per cent on the previous year.
91 per cent of these claims were for dogs which had strayed off the premises with just 9 per cent of claims involving dogs that had disappeared or been stolen.
Microchipping generally costs between £15 and £40 when carried out by a vet, but a number of charities have offered to do this for free or in return for a donation.