Foot-and-mouth insurance losses rise to £50m (Apr 01)

Losses from the foot and mouth outbreak are unlikely to hit insurance companies, too hard. The maximum insured loss looked set to stay below £50m for all exposures.

The £50m losses will mostly come from business interruption policies triggered by denial of access, cancellation of events and some specialist foot and mouth cover.

The figure is considerably lower than the total economic cost of £9bn that has been estimated by the Centre for Economics and Business Research. However, if the containment period is prolonged and the UK’s rural economy entered into recession, related frauds such as arson and staged burglaries could cause insured losses to rise significantly.

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