Warning over insurance policies relating to coronavirus pandemic

By Michelle Perrett

- Last updated on GMT

Food manufacturers need to be inform their insurance companies of any changes
Food manufacturers need to be inform their insurance companies of any changes

Related tags coronavirus

Food manufacturers could find themselves in breach of their existing insurance policies if they have made “significant” operational changes in the wake of COVID-19, a leading insurance buyer has claimed.

Mactavish, the insurance buyer and claims resolution company, has warned food and drinks firms that any changes could breach their insurance policies, preventing cover in the event of major claims. 

Mactavish also warned the pandemic had hardened insurance market conditions and increased costs, potentially also reducing cover and making it more difficult to comply with policy requirements or recover claims.

The company advised food manufacturers to change their risk management processes and inform their insurer of any changes. 


Mactavish said continuity plans were being revised, new businesses that had been incorporated into supply chains were being audited, and management teams were considering the welfare provisions in place for employees and customers. All these things must be disclosed to the insurance company, it stressed. 

The food and beverage insurance sector had already been hit globally in 2017 by a series of natural and man-made disasters, Mactavish added. It highlighted the use of composite panelling in manufacturing and processing plants as well as the unprecedented devastation of the 2019-20 Australian bushfire season.

However, the COVID-19 pandemic had “utterly transformed”​ the insurance landscape, making it more complex.  The company said insurers’ losses, estimated by Lloyd’s at more than $200bn globally, had placed greater emphasis on underwriting profitability, leading to more premium hikes and coverage erosion 

Supply Chains

Mactavish also highlighted the impact of complex supply chains in which any small disruption can have wider ramifications. It said the pandemic had revealed the fragilities underlying many supply chains and has exposed weaknesses. It highlighted concerns about potential increased in product recalls and business interruption as a consequence. 

The result is that it expects insurers to remove any uncertainty by inserting broad COVID-19 exclusions when policies were scheduled for renewal to remove any prospect of future cover.  

The insurance provider also highlighted that difficult-to-manage working environments depending heavily on new sources of temporary labour might present a real long-term challenge that could have a significant impact on insurance costs.

Bruce Hepburn, chief executive officer of Mactavish, said: “During these tumultuous times it is easy to overlook some vital finer details in your insurance programmes.  Failure to do so might pose existential challenges for your business as well as radically increasing cost. Considering the scale and the immediacy of these challenges, an expert, targeted response is required.”

In 2019, it was revealed that food manufacturers were having to decide increasingly where to place the focus when it comes to insurance​. 

Related topics COVID-19

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