To curb premiums increasing by as much as five times, food industry members need to team up to tackle the problem of composite panelling.
This is according to financial adviser Grant Thornton's Agribusiness Recovery Group that is warning the industry is effectively "self-insuring and desperately hoping that the whole thing literally doesn't go up in smoke".
The industry is at risk because the UK's food chain suppliers tend to use composite panelling in their premises. Despite its benefits, this panelling is proven to helping spread fire and as a result insurers are reluctant to insure buildings using such panelling.
Spokesman Duncan Swift said: "The Fire Brigade's policy when attending fires in buildings made of composite panelling has clearly changed from extinguishing a fire to containing a fire, given the highly flammable nature of the core of these panels. This decision has had enormous repercussions on the insurance industry that has in turn forced premiums to go through the roof or refused to cover affected businesses all together.
"The demise last year of Independent Insurers that provided a lot of the insurance cover arrangements for such businesses in the UK and the effects of the events of September 11 on insurers have inevitably made the situation worse," he added.
He called the industry to action, saying: "What is needed is a representative trade association to grasp the nettle, pool members' resources to engage in a new dialogue between the industry and the risk carriers to agree a timetable to replace the high risk panels, but in the meantime reinstate some basic cover to these very vulnerable businesses."
