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UK organization finds no insurance for biotech crops

(Tuesday, Oct. 7, 2003 -- CropChoice news) -- A survey of the five main UK farm insurance underwriters and brokers by the new campaigning organization FARM, found that neither farmers considering growing genetically modified (GM) crops or non-GM farmers seeking to protect their businesses from contamination by GM crops would be able to find anyone willing to give them insurance.

Insurance company spokespeople compared GM crops to Thalidomide, Asbestos and "Acts of Terrorism," according to FARM spokespeople.

All the companies surveyed felt that too little was known about the long term effects of growing these crops on human health and the environment to be able to offer any form of coverage.

FARM released the survey in conjunction with its briefing, "GM Crops: Sorting the Wheat from the Chaff," which, according to the group, sets out the facts about transgenic crops as they will affect practical, working farmers and the markets they produce for - if the Government gives the go-ahead for commercial planting in the United Kingdom.

For further information contact:

Freddie Whitefield 0207 349 5833
Robin Maynard 0207 349 5832/07932 040452

Summary of results and some notes on the comments made by the spokespersons for each company:

1. AIUA (Agricultural Insurance Underwriters Agency) (Norwich Union/Sun Alliance)
Have an exclusion clause for liability arising from GM crops. Do not anticipate any change in position.

Spokesperson said that the reason for this was that they had no idea what the long term effects might be. There is such a degree of uncertainty surrounding the potential risks, and the effects could take generations to manifest.

2. Rural Insurance Group (Lloyds)
Also have a set exclusion clause putting GM crops in the same bracket as "acts of terrorism."

The reason they have this is because they have no track record which they are willing to base assessments of risk on. They feel there is too much fear surrounding the topic. Whenever it comes on TV, it raises fears of mass problems associated with contamination. The insurance companies have learned to be cautious about new things.

3. BIB Underwriters Limited (AXA)
Have set exclusion clause which was amended within the last year, and will continue to apply if commercialisation is approved. Basically they would turn down any policy that has any association with GM. So that would include farm buildings and property insurance as well as public liability. The reason for this is that alongside the problems of cross contamination, they envisage problems associated with arson or vandalism due to anti-GM protestors.

4. NFU Mutual
Have had a policy for some time now that they will not provide insurance for farmers choosing to grow GM crops. Unless there is a serious increase in the quality of available information there will be no change in their standpoint.

They believe that the risks are not fully understood. They cannot see this position changing in the near future despite the proximity of possible contamination. Their recommendation to farmers considering growing these crops is to approach the industry/seed companies and obtain some liability insurance through them.

Business combined Policy Endorsements Part A 030A Genetically Modified crops:
"NFU Mutual will not indemnify the insured in respect of any liability arising from the production, supply of or presence on the premises of any genetically modified crop, where liability may be attributed directly or indirectly to the genetic characteristics of the crop. In particular, no indemnity will be provided in respect of liability arising from the spread or the threat of spread of genetically modified organism characteristics into the environment or any change to the environment arising from research into, testing of or production of genetically modified organisms"

5. Farm Web
Are currently reviewing their position on this in light of the postions taken by Re-insurance companies and developments in the EU. At the moment they do not have a set statement but say they would have to consider each case on its own context.

Quotes from insurance spokespeople collected by researcher during survey:

  • "The worry is that GM could be like Thalidomide, "only after some time would the full extent of the problems be seen"
  • "50 years ago they were writing policies for asbestos without a care in the world. Now they are faced with bills of hundreds of millions. There is a feeling that GM could come back and bite you in five years time."
  • "If a farmer approached us with any kind of insurance policy relating to a farm associated with GM we would have to refuse their application whatever the kind of insurance applied for."

To obtain a copy of FARM's GM briefing please contact Freddie Whitefield on 0207 349 5833 or at info@farm.org.uk