Hygiene Sue - News Board

Posted by Sue Richardson  15/08/2018

take a course - insurance for Insurers 

In September 2017 a food safety scandal involved employees at one of the largest suppliers of supermarket chicken in the country allegedly altering slaughter dates in order to extend the products’ shelf life.

 

The allegations led to the full shutdown of the company’s West Midlands facility. The facility closure reportedly cost 2 Sisters £500,000 per week. However, 

the costs did not stop there. Marks & Spencer, Aldi, Lidl, Sainsbury’s and Tesco have, in all likelihood billed 2 Sisters for their own costs of informing customers and pulling products from shelves, and may also impose contractual penalties. If the supermarkets source chicken from alternate sources there is no guarantee that they’ll return to 2 Sisters for supply once the plant resumes production. One would also imagine that the Food Standards Agency (FSA), having audited the facility nine times with no negative findings, will be slightly irked at the highly publicised reports and will be keen to be seen as a forceful and cautious regulator in the aftermath of this event – a further pressure upon 2 Sisters. The final cost of this fiasco is still to be determined, but it’s likely to be substantial. So how could recall insurance policy help in a situation like this?

2014 and 2016 saw a change in EU legislation which, while it reduced the risk of contamination in food and drink it increased liability claims against industry firms – aside from the obvious in allergen advice, which we at Hygiene Sue have covered exhaustively, it also lowered the risk of accidental contamination for consumers.

As shown with 2 Sisters group, a contamination incident can develop into a full-blown crisis for a business almost instantly.  Anyone involved in the food and drink industry should be looking at a comprehensive insurance combined with advance risk assessment, robust food safety systems and crisis management.  

With many insurance firms now sending their underwriters on Food Safety and HACCP courses so they don’t ‘fish for evidence’ but know the right questions to ask the best rule of thumb for insurance is full coverage, including recall costs, both first and third party depending on class; redistribution costs; product rehabilitation and/or restoration costs; destruction costs; extortion costs; business interruption costs following a contamination incident; and crisis consultancy costs.

Hygiene Sue offers course in Food safety (most importantly for managers and underwriters, level 4) and HACCP.  It is advisable for these courses to be taken up to ensure the best possible code of practice is followed and you have no need for the underwriters and their questions!

If you are interested in learning more about our courses and apprenticeships call Sue Richardson 01892 524957 or email  theteam@hygienesue.co.uk

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