Agricultural insurer NFU Mutual has launched a new avian influenza insurance policy to provide poultry producers with a degree of protection in the event of further outbreaks of the disease.
The policy has been developed in partnership with the NFU poultry team and London-based underwriter Aegis, and will provide up to £3m for loss of income on each site a producer owns.
It also offers two levels of cover for secondary cleansing and disinfection on farms – a lower limit of £100,000 and a higher limit of £200,000. This is available to all poultry producers in England, Scotland and Wales – not just NFU members.
The Department of Agriculture picks up the tab in Northern Ireland.
Avian influenza has become the major threat to both egg and poultrymeat producers in recent times, with just a single outbreak enough to cripple a business and damage earnings for the whole sector.
In November 2014 an outbreak of high pathogenic H5N8 at a Cherry Valley duck farm in East Yorkshire resulted in the culling of 6,000 breeding ducks and the destruction of 600,000 hatching eggs. Company losses were put at over £1m.
In February 2015, low pathogenic H7N7 hit a broiler breeder unit in Hampshire, with clean-up costs alone topping £200,000. And then in July 2015, high pathogenic H7N7 reached a large layer unit in Lancashire, belonging to Staveley’s Eggs, with losses again topping the £1m mark, and clean-up costs estimated at £500,000.
The total loss to the UK poultry sector of these outbreaks is put at over £50m, mainly from lost export sales as markets have closed either to the region affected or the whole UK.
Since the last outbreak, the industry has focused on ways of helping individual producers meet the costs – government assistance is limited to compensation for healthy birds on site that are subsequently culled.
There has been much talk about creating an industry fund, with contributions from breeding companies, meat processors and egg packers. But leading egg packers have recently decided not to go down this route, as more insurance options have emerged.
Late last year, the British Free Range Egg Producers’ Association (Bfrepa) launched a new policy with brokers Scrutton Bland, offering up to £50,000 per member towards the cost of secondary C&D, with the association absorbing the £30 per head premium for the first year.
Further cover is available from Scrutton Bland for an additional premium.
The emergence of the NFU Mutual’s new policy offers the sector a further opportunity to buy cover to help offset the financial risk of an outbreak.
Tim Price, rural affairs specialist at NFU Mutual, said: “As the UK’s leading rural insurer we have a commitment to farmers and growers. We work hard to provide the insurance services they need to protect their businesses from a wide range of risks.”