Food manufacturers face extra insurance challenges

With the introduction of the Insurance Act from August 2016 onwards, UK food manufacturers will need to ensure they avoid ‘data dumping’, according to a report by FoodManufacture.co.uk.

Under the new Act, senior management teams will be forced to supply information in a structured manner on what ‘the insured knows’ to their insurance providers, according to analysis by Aon UK.

Furthermore, companies will also need to disclose any knowledge held by ‘any other person’, which Aon UK says could be open to interpretation, but assumes that the Act would only cover agents and individuals covered by the insurance.

If your business is involved in the manufacture of food in the UK, it is your responsibility to ensure the safety of your employees. As well as good health and safety policies, your business should also consider employers’ liability insurance in addition to the required general business insurance.

Guy Malyon, the head of UK broking at Aon, said: “The new legislation aims to rebalance fairness for both parties of an insurance contract, removing the current draconian rules around disclosure and representation non-compliance, in many cases.

“However, these are being replaced by a new duty to ‘make a fair presentation of your risk’, which means companies should work closely with their brokers to ensure they are complying with the law in this regard.”

Other concerns for the UK’s food manufacturers include the risks associated with product recall, crisis management, flooding and fire damage, with electrical fires and arson a persistent issue for the sector.

From the most recent figures taken in 2014, property accounted for 34.5 per cent of overall insurance premium spend for food manufacturers. This number is surprising considering that budgets for employers’ liability (15.3 per cent) and healthcare/benefits (18.4 per cent) were far lower across the sector.