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Bird flu drives demand for specialist insurance products

As the ongoing crisis in the wild bird population continues, and with the conventional “high risk” season upon us, a specialist agricultural insurance broker, says it’s more important than ever that businesses have contingency plans in place.

Despite the nationwide Avian Influenza Prevention Zone (AIPZ), which has been in place across Great Britain since 3 November 2021, being lifted in August, new outbreaks are still being confirmed and restriction zones remain in force where the disease remains prevalent. Bird keepers are also urged to remain vigilant and still follow enhanced biosecurity measures to prevent future outbreaks.

Dallas Scott Davey, which is part of national insurance broker and risk management specialist, TL Dallas Group, allied with a forward-thinking Lloyds underwriting capacity, is currently arranging insurance cover for clients against bird flu, as well as handling claims, on behalf of businesses throughout the industry.

Ed Davey, a director at Dallas Scott Davey, explained: “Growers, egg producers and businesses that are ancillary to the primary farming and food production industries, are increasingly concerned about the exposure their businesses face due to AI. Record numbers of wild birds, particularly fledglings, sea birds and waterfowl, are being lost across the country due to the disease in the wild.

“Numerous poultry units have faced restrictions throughout the summer, despite this being the traditional low season and now, given the starting position, we will be much further down the road than normal, and businesses are understandably concerned that incidents could soar.

“The situation is compounded by agri-inflation and the increased financial risk the poultry and ancillary industries now face. For poultry farmers, accommodating rising chick, feed, power, logistics and other ancillary costs, means increasing sale prices to offset them, or clinging to ever thinner margins if contracts are non-negotiable. Either way, risk management is ever more important.

“With the extent of AI claims in 2022, a number of insurers are looking at re-rating their books. Plus, producers, suffering from agri-inflation, remain unclear as to whether existing policy wordings can accommodate every scenario. Indeed, some producers are unaware of their responsibility to organise secondary cleaning and disinfection. It is their responsibility to draw up an appropriate plan and obtain approval from the Animal and Plant Health Agency (APHA). Restocking of birds may well be delayed if an agreement can’t be reached resulting in further consequential losses.”

Ed continued: “These are unprecedented times in the poultry and ancillary sectors. Understanding the financials, the production process and the standards of existing biosecurity are key. However, it’s crucial to adopt a mindset around contingency planning. In many cases biosecurity isn’t as well managed as it states on paper and having advisers on board that understand what’s at stake is key. 

“With a combination of up-front financial planning upon which the underwriting hinges, and a clear understanding of the level of biosecurity measures adopted, individually tailored insurance cover is available. Most importantly it must measure the true consequential loss to the business as a result of disruption caused by an outbreak, rather than basing cover around traditional material damage market valuations.

“Once you understand what protection the cover delivers to the business, it really makes you think not just about an outbreak at your own holding, but the implications the lockdown of neighbouring units can have within any 3km prevention zone or the 10km surveillance zone. It isn’t just about the scenario where you have dead birds on the holding; just being a suspect premises can have serious implications too.  

“Furthermore, should you have multiple businesses operating from a location where the poultry unit is based, such as holiday homes, farm shops or retail units, you need to think about possible interruption to each of those income streams as well. The cover available is very relevant to businesses today that have a combination of exposure to disease outbreak as well as multiple business interests.”

Dallas Scott Davey launched in Lincolnshire last year and is part of TL Dallas. The business offers specialist agricultural and business insurance and has now relocated to Plowright House, which is the University of Lincoln’s former agricultural campus within its Riseholme Estate. Today Plowright House is a Barclays Eagle Labs office hub with a focus on cutting-edge AgriTech research and related businesses. Dallas Scott Davey now has a team of five in Lincoln and plans to double in size over the next 18 months, recruiting five new account handlers and brokers.

Ed added: “In a short space of time we’ve quickly established a strong client base across a wide area, with our core business being in Lincolnshire and Yorkshire. Farming is experiencing significant challenges across all sectors, not least due to agri-inflation. Steering a course for these businesses and building the right insurance strategy needs more careful attention than ever before.”

For further information, call Dallas Scott Davey on 01522 449711 or email