50,000 Farmers Uninsured
An estimated 50,000 UK farmers have virtually no insurance cover should they cause damage to the environment. This is the estimate from Land Based Underwriters who say that despite the farming industry regularly appearing in the top three of the UK’s biggest polluters, thousands are uninsured.
Many farmers wrongly assume that their standard public liability insurance policy, with a limited environmental extension, covers them for the risks they face today.
The reality is that many are dangerously exposed and leaving themselves vulnerable to huge fines and costs should a pollution incident occur.
Financial Implications of No Environmental Liability Insurance
Pollution clean-up is expensive. A farmer recently had to pay more than ten thousand pounds after pig effluent polluted more than six kilometres of the River Witham.
Heavy fines have also been introduced as a result of the Environmental Liability Directive – a European wide regulation that states the ‘polluter must pay’. And regulators are backing up their words with actions; they continue to bring prosecutions against farm owners. One UK farmer was recently fined £30,000 for failure to manage odour from his poultry unit. However, fines are often dwarfed by clean- up costs and environmental restoration costs which farmers now face to fix the environmental damage which they had caused. And these are being incurred more and more frequently. In one recent example, fines accounted for less than 10% of the total costs incurred in dealing with a spill.
Word of Advice
Roger Morgan, managing director at Land Based Underwriters said: “When a spill or accident occurs which is going to damage the environment, it is critical that the insurance is triggered immediately and the clean up contractors brought in and relevant authorities notified. Not having insurance adds uncertainty, can cause delays - hampering this effort.
Morgan continues: “UK farmers who have no environmental liability insurance cover or who wrongly think their existing liability insurance covers them for their environmental exposures, are taking huge chances; not only with their own finances and reputation but ultimately with our environment.”
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