Food industry uproar over hike in premiums
have prompted the UK's industry's trade body - the Food and Drink
Federation (FDF) - to bring together food manufacturers and the
insurance industry, to try and address the issues surrounding
recent increases.
Steep increases in insurance premiums for many food manufacturers have prompted the UK's industry's trade body - the Food and Drink Federation (FDF) - to bring together food manufacturers and the insurance industry, to try and address the issues surrounding recent increases.
The FDF writes this week that the increases in insurance premiums for property and business interruption have been due partly to September 11, but also to the problems of buildings constructed with certain types of composite insulation panels, which insurers deem a higher fire risk.
According to the FDF, the size of the increases has baffled some companies who are unaware of the reasons behind them. In addition, food manufacturers have also had to accept increases in employers liability insurances due to a general uplift to cover the higher cost of claims.
The FDF recently surveyed food and drink manufacturers to find out what increases - if any - they had experienced. They found that most increases were in the range 30-90 per cent, but with the largest year-on-year property/business interruption premium increase being a startling 585 per cent. Eighteen out of 56 companies that responded to the survey advised of increases of 100 per cent or more, the largest employers' liability increase notified was 300 per cent, and seven companies notified increases of 100 per cent or more for employers' liability.
One company surveyed reported that despite a 20-year claim-free record, they would not be offered an insurance renewal because of their combustible sandwich-panels. They managed to renew with another insurer but this meant a large excess and a premium increase of 368 per cent.
Insurance specialist at FDF Tom Evans said: "Feedback from our members shows that these increases are a real issue for many food manufacturers. With confusion over the huge hikes in premiums - some seemingly unwarranted - it was essential that we brought manufacturers and insurers together to address the situation."
An upcoming conference in London- 'Controlling the Cost of Insurance in the Food Industry'- will seek to find the answers to this new, and highly expensive, phenomenon.
