Extend cover to mop up high cost of fuel spillages
Farmers who risk hugely expensive clear-up costs from fuel spillages caused by accident or vandalism are being encouraged by insurer NFU Mutual to extend their existing policies to ensure they are covered.
The company is also working on a new biosecurity insurance scheme to extend cover to other risky areas to help farmers meet their environmental responsibilities under the new CAP regime.
Several farmers contacted the insurer after Farmers Weekly highlighted the plight of Tom Allen-Stevens.
The Oxfordshire farmer was faced with a £16,000 clean-up bill after thieves broke open a locked fuel tank and let 1400 litres of diesel seep on to surrounding land and into a watercourse.
Mr Allen-Stevens managed to contain the worst of the spill and prevented it spreading on to a neighbour’s property.
But, when he contacted NFU Mutual, he found his public liability policy only covered damage to third parties.
Mr Allen-Stevens eventually received an ex-gratia payment of £5000 in recognition of his efforts to contain the spillage.
Donny Macleod, reinsurance and underwriting manager at NFU Mutual, said the speedy action had avoided a potentially much larger claim had the fuel spread to next door’s property.
“Our public liability cover is set up to cover injury and damage to other people’s property.
The UK market generally doesn’t write clean-up cover on the policyholder’s property.
But, following the concerns of a number of farmers, we have been able to extend their storage tank cover to allow for such incidents.”
He admitted the case had spurred the company to investigate the provision of wider biosecurity cover.
“Three years ago we started looking at pollution cover in its widest form, but found it was too expensive.
This claim has provided the momentum to find a narrower, more cost-effective solution.”
Key areas include farm waste, such as accidental slurry spillages, and fly-tipping, which can leave innocent landowners facing huge bills to clean up toxic rubbish.
“We want to be able to provide cover where farmers are faced with situations that demand action to fulfil their duty of care to the environment, on which their single farm payment depends,” said Mr Macleod.
NFU Mutual aims to offer such cover by 2007.
Accidents at work and collisions between tractors and other road users are two of the most common claims being filed by farmers, says Sid Gibson, chief underwriting manager at NFU Mutual.
“These are two areas that need more attention,” he said.
“We are seeing too many employers’ liability claims – farming is still a very dangerous industry.
It is probably also a symptom of the increasing pressure on farming.”
Collisions involving tractors often happen when the machine is turning right, especially when towing a trailer, and cases increase at harvest time.
“Indicators are often covered in mud or dust or are not working.
Another reason is that tractors often swing left to get enough turning room before turning right, and vehicles assume it is safe to overtake.”
Hard-to-spot motorcycles are often involved.
“Claims can often be high,” Mr Gibson said.
“These days it’s common to find company directors riding bikes, so loss of earnings can be much higher than, say, 20 years ago.”