Insurers not yet in the clear over horsemeat scandal as claims emerge


Contaminated meat claims linked with the horsemeat scandal are now reaching insurers despite clauses that limit liability within product recall policies.

Liability in product recall insurance tends to hinge on whether a product would or could cause either property damage or bodily harm. With horsemeat causing neither, insurers had been expected to have limited exposure beyond recall policies.

However, sources within the London market have reported that claims have already been lodged with insurers. One Lloyd’s source told Post: “Claims have been made, but whether they get anywhere is a different story.”

Julie Ross, vice president of crisis management at Liberty Mutual Insurance Europe, added: “It’s very early days and it may be that none of these are covered when they come to be adjusted. But, typically, you need to tell your insurer when something comes up that may lead to a claim.”

Post understands the UK’s product recall market is dominated by a handful of firms including Ark, Canopius, Kiln, Liberty, Manchester Underwriting, Sagicor and XL. There is a market consenus that claims have been received, however, Ark, Sagicor, Manchester Underwriting, Liberty and Kiln all denied receiving any claims. Canopius declined to comment and XL had not responded as Post went to press.

One senior London market source suggested claims are inevitable where losses have been suffered but added insureds may be seeking to test wordings that limit liability. They said: “To a certain extent the policy language is untested but there is the potential that property damage could be used.” Noting that the presence of horsemeat as a third-party agent could be used to suggest products themselves had been damaged, the source added: “That’s not the intention of the wording.”

Manchester Underwriting London market director David Eynon suggested it would be difficult to link the horsemeat to damage or bodily harm triggers, noting some claims may fall under product liability or guarantee offerings. However, he added his firm had looked into offering a product guarantee policy but could not see a “viable” way of underwriting such a product profitably. “It is very difficult to contain exposures so that we don’t get hit every time there’s a bad smell,” he said.

Bute threat
A spokeswoman from the Food Standards Agency confirmed that only one product has been found to contain the veterinary medicine phenylbutazone, also known as bute – the presence of which had been suggested as a possible trigger for coverage. In sufficient doses bute can cause a serious blood disorder in humans. It was banned after it was found that one in 30 000 people suffered serious side effects.

The discovery of bute in Asda ‘Smart Price’ corned beef was revealed on 9 April. The product had been withdrawn from shelves on 8 March.

Speaking to the House of Commons on Monday, food minister David Heath said testing had shown more than 99% of processed beef products to be clear of horse DNA at more than 1%. Heath and the Health Secretary Jeremy Hunt are expected to announce a strategic review of the overall handling of the horsemeat scandal.
“This will be wide ranging, to restore and maintain consumer confidence in the food chain and consider the responsibilities of food businesses, and practice, throughout the wider food chain, including: audit, testing, food authenticity, food safety and health issues,” Heath said.


0.5% of EU carcasses positive for bute
Europe-wide tests on slaughtered horses have revealed that 0.5% of carcasses destined for the food chain contain veterinary drug phenylbutazone, or bute.

The UK and Ireland, where all carcasses are now routinely tested for bute, accounted for 15 of the total of 16 bute-positive carcasses. The only other member state to report bute in carcasses destined for the food chain was the Czech Republic, which tested eight horses. By contrast, the UK and Ireland tested 836 and 840 carcasses respectively, accounting for more than half of the tests in all European Union member states.

The bute testing criteria called for one sample for every 50 tonnes of horsemeat, with a minimum of five tests. Some member states exceeded the number of tests recommended. The tests, requested by the European Union in the wake of the horsemeat scandal, also found that 4.6% of beef samples from member states were composed of more than 1% horsemeat.

EC commissioner for health and consumers Tonio Borg said the findings confirmed “this is a matter of food fraud and not of food safety”. He added: “Restoring the trust and confidence of European consumers and trading partners in our food chain following this fraudulent labelling scandal is now of vital importance for the European economy given that the food sector is the largest single economic sector in the EU. In the coming months, the commission will propose to strengthen the controls along the food chain in line with lessons learnt.”

Of the 2250 products tested across the European Union, 193 were positive for more than 1% horse DNA. Horsemeat was most commonly found in beef products in France, where 13.3% of 353 samples contained equine DNA. Greece and Latvia were the only other states to report rates of 10% or more. None of the UK’s 150 product samples tested positive for horse DNA.

The UK Food Standards Agency has been engaged in three stages of testing meat products, beginning with the food industry completing its own tests, before the regulator completed an investigation into a representative sample, with the European programme completing the schedule.

This article was published in the 18 April 2013 edition of Post 

  • LinkedIn  
  • Save this article
  • Print this page  

You need to sign in to use this feature. If you don’t have an Insurance Post account, please register for a trial.

Sign in
You are currently on corporate access.

To use this feature you will need an individual account. If you have one already please sign in.

Sign in.

Alternatively you can request an indvidual account here: