The consequences of receiving a liability claim that exceeds insurance policy indemnity limits could be catastrophic for fruit producers, warns farming and rural insurance advisor Acres Insurance Brokers, amid escalating personal injury awards over the last decade.
“Probably the most important insurance cover that any fruit producer should have is liability insurance,” explains Rollo Parsons, director of Acres Insurance Brokers. “Getting the right advice on indemnity levels, from an adviser that understands your business is crucial, if you are to have a fit for purpose policy.”
The fruit sector has long been exposed to elevated risks due to its requirement for a larger workforce, regularly located in a single place such as the packhouse, and often housed on-site. This presents the potential risk of multiple claimants in the event of an incident in which the landowner and/or employee is alleged to be at fault.
The majority of the farm insurance market has a £10 million indemnity limit for both Public and Products Liability (PL) and Employers Liability (EL) respectively. This is arranged on a “Per Event” basis. Mr Parsons warns that fruit businesses must thoroughly review current liability insurances with a competent advisor, fully conversant with the farm operation, to ensure adequate cover is in place.
“The problem we have seen progressively over the last decade is that personal injury awards from the courts have been getting higher. When employing a relatively large workforce, with workers accommodated on-site, the risk potentially multiplies,” says Mr Parsons.
Rollo Parsons
“For example, if a caravan housing three workers was to catch fire, and there was an allegation that the landowner was at fault due to some perceived negligence, all three workers could potentially seek redress for injuries or illness sustained resulting from the fire event,” he continues.
“In this situation, all three claimants would therefore be seeking redress from the same pot of £10 million. There are a number of cases going through the courts now, although in other industries, where the personal injury awards are likely to be between £10 million and £20 million alone.”
Devastating consequences
The consequences of having a PL or EL claim that exceeds an insurance policy indemnity limit can be devastating, according to Phil Cornish, who has recently joined the Acres team at its South East regional office in Kent, where it places a strong focus on the fruit and viticulture sector.
“Any court award over the indemnity limit can be enforced against personal assets, if trading as a sole trader or partnership, or against company assets if trading as a limited company. Such an award against many fruit farming businesses would be catastrophic,” says Mr Cornish.
Acres Insurance Brokers offers a simple, low-cost solution, adding a second policy for another £10 million over and above existing insurance cover. This can be bought as an “excess layer” for surprisingly little expense,” he adds.
Mr Parsons says, “We commonly see growers with between 10-100 plus employees, with £10 million EL indemnity limits. This is inadequate for the needs of a modern, large-scale employer in the horticultural sector.
“Our advisors will evaluate and identify factors that will influence individual requirements. With a full and thorough policy review, we can help safeguard against potential exposures of this type with reasonably priced and simple-to-arrange solutions.
“Ultimately, growers need to be able to focus on core activities. That is more easily achieved if they have the comfort of knowing that their insurance policies are correctly arranged after receiving proper advice,” he adds.
Rollo Parsons, Kevin Hogben and Phil Cornish will be manning the Acres Insurance Brokers stand at this year’s National Fruit Show (Stand S15, Maidstone Exhibition Hall) at the Kent Showground, 2-3 November
