New Zealand Insurers
Refuse to Cover GM

Third World Network Biosafety Information Service 2oct03

[Two related articles below]

Dear friends and colleagues,

RE: NZ INSURER REFUSES TO COVER GM

A major insurance company in New Zealand, Vero, said it would not cover farmers for liability against damage or injury from the use of genetic modification technology.

"We perceive that the use of genetic modification technology in farming will present liability risks that we do not wish to insure," the company said in a memo. It is expected that other insurance companies will also follow suit.

Elsewhere, for instance in Australia and the UK, insurers are also reluctant to provide insurance to farmers who grow GM crops on the perception that the unforeseen risks of GM crops/foods are too high.

Earlier in November 2001, the insurance council in Australia already said, because the technology is new and complex, there is no way of assessing the risk of damage claims arising in the future and therefore no way of setting insurance premiums.

Related to this issue, insurer NFU Mutual in the UK in an e-mail reply to a query by the Genetically Modified Food-News, said that “no-one knows the risks of growing GM crops in this country and it would be irresponsible of us to provide insurance when we are working in the dark.”

With many GM companies refusing to take responsibility for any damages or contamination caused by the seeds they sell, this means that farmers growing GM crops are doing so at their own risk, leaving them personally liable for any future damage resulting from planting the crops.

In developing countries where most farmers cannot afford to take private civil lawsuits, it can be expected that national or local governments that pursue a GM agriculture policy may have to be responsible for damage or losses suffered by their farmers. Thus in formulating national laws, governments would need to address issues of liability and access to remedies for farmers who may be adversely affected by GM crops. The establishment of compensation or emergency funds, as appropriate, should also be considered.

With best wishes,
Lim Li Lin and Chee Yoke Heong
Third World Network
121-S Jalan Utama
10450 Penang
Malaysia
Email: twnet@po.jaring.my
Website: www.twnside.org.sg

Big Insurer Refuses GE Farm Cover

RUTH BERRY / The New Zealand Herald 27sep03

New Zealand's second-biggest insurer, Vero, will not cover farmers for liability against damage or injury from the use of genetic modification technology.

Green Party co-leader Jeanette Fitzsimons warns that other insurance companies are likely to follow suit and says the decision reveals "just how big a risk insurers believe the GE industry to be".

"The combined result of the liability regime and the lack of insurance is that the full risk for any GE organism that goes wrong will be borne by the victim."

Environment Minister Marian Hobbs, Federated Farmers and the Insurance Council agreed that other companies would follow the lead set by Vero, formerly Royal & SunAlliance, in refusing cover.

But they played down the significance, saying it had been predicted and simply reflected the newness of the technology.

Vero informed its brokers in a memo this week of the decision to include the exclusion in farmers' liability policies. The memo was released by the Greens yesterday.

The moratorium on the commercial release of GM crops will be lifted at the end of next month.

"We perceive that the use of genetic modification technology in farming will present liability risks that we do not wish to insure," the memo said.

The exclusion meant farmers would not be covered for personal injury or damage to property directly or indirectly caused by:

- "The presence on any premises of, or the production of or supply of any GMO [genetically modified organism] or any other material that has been genetically modified where liability may be directly or indirectly attributed to the genetic characteristics of such organism or material."

- "The spread of or the threat of spread of any GMO characteristics into the environment or any change to the environment arising from research into, testing of or production of GMOs or other material."

Ms Fitzsimons said the combination of lack of insurance and the Government's strict liability regime meant people were liable for GM damages only if they broke the law, which would be hard to prove.

Ms Hobbs said insurance was based on past history.

"There is no past history in New Zealand and limited information elsewhere in the world for GMOs."

It was not unusual for the industry to be conservative about covering something like a GMO until it had better information about the sort of financial exposure it might carry.

The liability regime being introduced in the New Organisms and Other Matters Bill would strengthen incentives to comply with the Hazardous Substances and New Organisms Act.

Anyone who caused injury or damage through use of a GMO could be held liable whether or not they were insured, said Ms Hobbs.

If there was any possibility of significant harm to the environment or human health, the expert independent regulatory authority, Erma, would not approve an application for release in the first place.

Insurance Council chief executive Chris Ryan said it was likely, as the Greens said, that other companies would follow Vero, but this was not necessarily a long-term stance.

Insurance companies overseas were beginning to offer GM protection and the same thing would probably happen in New Zealand.

source: http://www.nzherald.co.nz/storydisplay.cfm?storyID=3525771&thesection=news&thesubsection=general 1oct03

Australian Insurers Wary of GM Crops

BOYD CHAMPNESS / Farmers Weekly Interactive 18nov03

AUSTRALIA'S green movement received an unlikely boost in its fight against genetically modified crops last week when the insurance industry admitted it was reluctant to cover the biotechnology industry against litigation.

The Insurance Council of Australia (ICA) has said that it is loath to insure farmers, biotechnology and food companies for claims involving GM foods. It would mean farmers growing GM crops at their own risk, leaving them personally liable for any future damages claims.

The Weekly Times newspaper reported that the insurance industry feared a repeat of the situation similar to the Wittenoom asbestos disaster, in which mining companies were sued for millions of dollars in damages by workers who contracted cancer years after being exposed to the deadly mineral.

The insurance council believes "the unforeseen risks of genetically modified foods may be too high for insurers".

The newspaper said insurers were wary of lawsuits involving consumers claiming allergic reactions to GM foods, contamination of non-GM crops and the development of mutant herbicide-resistant weeds.

The insurance council said, because the technology is new and complex, there is no way of assessing the risk of damages claims arising in the future and therefore no way of setting insurance premiums.

"It is such a new technology, it is virtually impossible to assess the risks down the track," ICA spokesman Rod Frail said.

And defending GM claims in court could prove difficult because of the complexity of the technology, the ICA said.

Two of Australia's biggest farm insurers, CGU and Elders, confirmed their uneasiness with GM crops to the Weekly Times.

"GM technology is still in its infancy and research on any direct or indirect impacts is far from conclusive," CGU spokesman Chris Jackson told the paper. Mr Jackson said farmers who intend to grow a GM crop should declare it and cover would be "assessed on its merits".

Elders national insurance manager Kim Perrin said farmers should not assume they were automatically covered under their normal public liability policies, and should check with insurers before proceeding with GM crops.

Product liability lawyer David Poulton, from Minter Ellison, told the Weekly Times that insurance companies were likely to insert exclusion clauses in policies or decline to cover the risks associated with biotechnology altogether.

source: http://www.fwi.co.uk/live/ozworld.html 1oct03