COMPENSATION CLAIMS:THERE IS no prospect that insurance companies engaged by pigmeat producers will compensate them for the recall of all products ordered last weekend by the Government, according to senior insurance and food sector sources.
Although insurance and other sources said routine insurance contracts typically covered product liability, they said such coverage would not extend to an all-embracing withdrawal of products as a result of Government action to contain a food scare.
Such an action would fall into the “act of God” category of uninsurable risks, they said. While an insurer was more likely to pay a claim under product liability coverage in the event of a person becoming sick due to a flaw in a food product, this was not a feature of the current case.
Farming and food industry interests are seeking Government compensation for the recall, which may ultimately cost in the region of €200 million.
At issue in talks with the Government yesterday was the question of providing compensation for producers who receive claims from other companies that use the pigmeat when making products.
One example cited was the possibility of claims for compensation from a manufacturer of frozen pizzas whose product must be withdrawn because it contained pork product from another supplier.
The Government is seeking financial assistance from the EU. Despite negative signals from the European Commission, Taoiseach Brian Cowen has said the Government is devising a scheme that will form the basis of discussions between Minister for Agriculture Brendan Smith and European agriculture commissioner Mariann Fischer Boel.
