News & Insights

Industry report: 5 food production risks to address for business resilience

Published 05 November 2020

Obtaining critical insurance protection has become increasingly challenging for food producers, who must manage multiple areas of risk in their operations and are facing stringent risk management expectations from insurers. Our industry insight addresses the key areas of risk management, detailed in our comprehensive report .

Key factors affecting the availability and cost of insurance cover include the current hard market and insurers’ unwillingness to take on risk, and increased sensitivity to the cost of claims, particularly for property, which for many food producer manufacturers is a high risk property set up.

The prevalent impacts on food producers renewing their business insurance cover is the expectation to provide significantly more detail when procuring insurance cover, and to be prepared for insurers to critically examine every risk aspect of the business.

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5 key risks for food producers to address

Food production insurance challenges and what they mean in terms of building business resilience are unpacked in this report, providing expert insight and guidance to help in facing these challenges.

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Access the full report The 5 primary food production risks to address for resilience, and gain detailed information on these risks and insurance considerations by downloading the full report.

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Managing the 5 key risks – summary insights

Gaining adequate risk protection and seeking or renewing insurances for food production businesses can be achieved with expert insurance broker insight who can provide a systematic approach to the exposures involved in your particular operation.

As a summary, here are some key insights for the 5 risk areas analysed in this report.

    1. Insurance market and capacity

      Be prepared for Insurers to ask for risk surveys by independent analysts to identify assets and exposures. They will also want to see plans for risk engineering improvements and will want updates on agreed actions.

      Unless you provide all the relevant information, insurers may be unwilling to consider becoming involved or to offer renewal, or they could impose limits on their risk.

    1. Property 

      From equipment failure to compensation for consequential losses during down time, the nature of many food production processes presents significant property related risks to be managed.

      In particular, the use of expanded polystyrene (EPS) insulation is strongly linked to fire risk.

      A broker with food production expertise can assist in establishing the property risk management standards that insurers will expect to see in place.

    1. Cyber
      In an increasingly automated industry, the reliance on digital systems brings vulnerability to cyber interruptions. 

      These operational risks can be reduced via staff education around preventing cyber fraud through social engineering, and protection of the organisation’s systems, and these measures need to be formalised from an insurer’s point of view.

    1. Product recall and food safety

      With considerable bio security regulations and risks to manage, no contamination in food-grade products can be considered minor. Product recall insurance may provide support in direct costs and losses from problem batches, loss of sales and reputational damage.

      Risk mitigation processes that account for every item in the value chain, with the ability to track batches, quickly identify issues and communicate with suppliers and customers, are key to avoiding product recall impacts and provide assurance to your insurer.

    1. People and employee risks

      As food production operations often involve high risks for people in the manufacturing environment, this calls for robust safety and injury management processes and key protocols for minimising preventable risks and responding to any emergency.

      Key to people risk management is detailed understanding of your people risk factors, including legislation and how the courts are interpreting and enforcing the law, alongside conducting a systems of work review to confirm that there are no foreseeable gaps that could cause significant injury or a fatality.



Our food production risk and insurance experts can deliver solutions

As the only food production insurance specialism in Australia our team has the expertise to work with your business to understand, advise and develop optimal risk management and renewal strategies.

Gaining optimal risk solutions for clients in hard market conditions requires the combined expertise and capability Gallagher provides through

  • a partnership approach between the organisation, Gallagher brokers and the insurers
  • detailed risk management information
  • global expertise in accessing insurance markets in order to offset local market constraints.

We work to explore all the options available to your business, discuss a range of pricing and funding options and ensure that you are appropriately protected against all insurable risks.


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Further reading

Gallagher food production risk and insurance expertise 

Cyber attacks on food producers are growing, the potential risks are crippling

Insurance market update: food production challenges from farm to table


COVID-19 food and beverage production industrial contamination: response and protocols
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COVID-19 food and beverage production industrial contamination: response and protocols

16 March 2021
Cyber attacks on food producers are growing, the potential risks are crippling
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Cyber attacks on food producers are growing, the potential risks are crippling

29 June 2020
Insurance market update: food production challenges from farm to table
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Insurance market update: food production challenges from farm to table

19 May 2020