Analysis: Zoo insurance: A walk on the wild side


  • The broker acts as the eyes and ears of the insurer, visiting the zoo often several times a year to check proper controls are in place
  • A commercial combined policy can provide adequate cover, but not in complex cases involving higher limits
  • There has been a trend of insurers dipping in and out of the market

Zoo insurance is a niche market, with only a few underwriters and brokers, all very much focused on managing a ferocious variety of risks for visitors, staff and animals.

The fires at Woburn Safari Park and London Zoo are just two recent examples of the dangers facing zoological attractions.

In Woburn in January, 13 patas monkeys died in a blaze, the cause of which is still unconfirmed following investigation. Only 10 days earlier in London, an aardvark had died in a fire, the cause of which remains under investigation.

Zoos face many other risks, including animals escaping, attacking visitors or even mauling keepers to death.

Given the high level of danger that comes with keeping wild creatures in captivity, the insurance industry has a crucial role to play.

This is a niche market, with a handful of underwriters, dominated by the Lloyd’s market, and a clutch of specialist brokers.

The Woburn and London fires highlight the need for well-maintained equipment and adequate alarms, says Louisa Honeybun, senior livestock underwriter at Argo Global. “Most animal bedding and some feeds are very flammable and early detection is essential to minimise loss of life.”

Jenny Boatman, also a senior livestock underwriter with Argo Global, points out that many of the animals housed in zoos have a low monetary value, but are genetically valuable because they are often used in breeding programmes.

However, giant pandas are likely to be insured because of their high value. Tian Tian and Yang Guang are on loan from the Chinese government, for reportedly £760,000 in yearly fees – and Edinburgh Zoo is incurring additional costs of around £2m a year for the pair.

The aim is usually to recoup the costs through ticket sales, but money does not come in just from this avenue. Zoos may earn revenues from research work or corporate events.

If a zoo needs to close because of fire, flood or a notifiable disease like foot-and-mouth, business interruption and contingency insurance covers the revenue lost through forced closure and event cancellation.

Out of Africa and into Lloyd’s

A project to protect rhinoceroses and help them live safely in the wild is insured by Markel International. Senior underwriter Robert Wells has travelled to South Africa to see rhinos being transported away from poachers and to the Okavango Delta, a vast inland river area in the north of Bostwana.

Africa’s black rhinos are critically endangered and number around 5000. The animals are hunted for their horns, whose powder is believed to cure a host of diseases – and is viewed as a symbol of wealth in Vietnam. Although experts say it has no medicinal value, the horn is worth more than gold: around £72,000 per kilogram.

“We’ve been specialising in wildlife for over 20 years and insuring the relocation work is a growing part of the business,” says Wells.

He says seeing the animals up close and knowing they are going to a safe haven is an incredible experience. “There is no room for error and it is a huge task, carried out by those who know what they are doing.”

Markel also insures other valuable breeding stock for mortality such as buffalo and sable and will cover transit risks for zoo animals such as panda bears.

In South Africa, Markel works closely with local broker Satib, which is also committed to conservation. Julian Freimond, divisional director, wildlife, comments: “These relocations offer the best solution. Unfortunately, in South Africa there is corruption and the government is not doing enough to stop poaching and that includes weak sentencing. In Botswana, there is far more commitment and a much tougher stance.”

He says Markel has provided preferential rates and, when sadly two of the 70 relocated rhinos died, claims were dealt with fairly and promptly.

Satib also sponsors local projects that aim to reduce human-animal conflict, like educational projects in schools and counter poaching support. It also backs work that puts GPS collars on lions in Zimbabwe: villagers receive a mobile phone notification when a lion approaches so they can move people and livestock to safety.

Boatman says zoos manage veterinary risks by monitoring animals closely and putting new breeding stock in quarantine on arrival. However, “seasonal migration of birds including waterfowl currently pose a high risk of infecting the captive bird collections with avian influenza, and management can be difficult with large open-air enclosures,” she adds.

Brokers have a crucial role in the zoological sector and act as the eyes and ears of the insurer. Jon Newall, managing director of broker Lockyers Insurance, says there is considerable variation in the risks he sees. Animals may be part of a wider theme park or can be in the grounds of a stately home, for example. Meanwhile, some private zoos are not open to visitors at all. There are also animal sanctuaries, some housing exotics, and petting zoos, which can be attached to working farms.

“In some cases, cover can be adequate with a commercial combined policy with some additional endorsements,” Newall comments. “But in others, it is more complex, involving higher limits of public and employers’ liability and business interruption, in addition to any animals being insured against mortality.”

If an accident involves an employee or a visitor, besides losing revenue and reputation, a zoo could lose the government licence required to operate.

Newall explains there is adequate capacity, but the pool of underwriters is relatively small and mainly focused on Lloyd’s. He adds that underwriters are demanding and place a high emphasis on risk management. “As a broker, we always visit the premises in person and will almost certainly do this several times a year. If we don’t feel there are proper controls in place, or that animals do not appear well cared for, then we will walk away. We have a duty to the insurer to give them the full picture, as does the client with their duty of presentation.”

Reducing fire risk

Investigations are underway at London Zoo to find the cause of the fire. The conclusions will help other facilities take preventative action.

Former firefighter Mike Wisekal is a senior investigator at Ific Forensics. He is not involved with this case, but he investigates serious incidents and advises on risk management.

He says holding wild animals in manmade captivity requires an exceptionally high level of risk control, with regular assessments on potential hazards and how these can be mitigated. “Everyone needs involvement, from those running the zoo to the keeper with day-to-day involvement for animal care and they may well need to bring in experts who can identify the risks.” He adds that it is also crucial to ensure new employees are aware of their responsibilities and indeed there should be continual training.

In terms of assessments, Wisekal explains that some of the areas that need careful examination include:

  • Wiring: Is it safe and up to date? Can animals access it?
  • Lighting: For example, halogen downlighters can cause fire if they are not properly installed
  • Combustible materials: Where are bedding and feed stored? How are they disposed of?
  • Smoke detectors: Where are they located? Are they hard-wired and battery backed-up?
  • Buildings: How old are they? What materials were used? How resistant to fire are they? Is there scope to improve?

"There has to be the highest standards of housekeeping and a committed culture,” Wisekal says. “The only way to minimise risk is through checks, a committed culture and being proactive.”

In and out of the market

David Still, commercial insurance executive with broker Lycetts, says there has been a trend of insurers dipping in and out of the market. “Some set out with a genuine commitment to insure zoos but, ultimately, end up stepping back after suffering a large loss.”

The work involves “rigorous risk assessments” and sustained efforts to ensure appropriate levels of cover are in place, Still adds. “We will invest several months of extensive and painstaking background work.” Lycetts offers guidance through a risk management service.

One of the trickiest aspects, where guidance is often appreciated, is transit. “The need to transfer animals between collections arises to maintain healthy populations and genetic variability within captive populations,” explains Honeybun. “It is, therefore, critical that zoos and safari parks have the capability and facilities in place for such movements.”

When a zoo is closed because of financial failure or welfare reasons, animals need to be moved to another facility, which can be a complicated and dangerous business. It often causes them stress.

“Animals can be transported by air, sea and road, which can be an extremely costly process,” says Boatman. “Should the unexpected occur, and an animal dies during transit, a significant amount of the conservation budget can be lost. It is for this reason that many facilities choose to insure the animal against mortality during transit.”

Behind the scenes, specialist insurers and brokers provide a valuable service both in pushing home the importance of risk management and providing financial protection. But as the recent fires show, zoos remain places where risks, like their inhabitants, are far from being fully tamed.

rhino trip

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