Expert Opinion: Insurance: Cost or Investment?  

By Gary Clifton, NFU Mutual Agent  


I have had the pleasure of working with many clients in the food & drink sector in  my career – manufacturers; hotels and restaurants; single and multi-site; new  ventures and major regional brands.  

Many had blind spots and hidden vulnerabilities in their risk management programme. Some were minor, some significant; such as:  

  • Steam pressure plant not covered in the event of explosion;  
  • Third party injury by fork lift trucks not covered;  
  • Massively underestimated plant, machinery & contents inventories;  
  • Market value used for building reinstatement costs;  
  • Incorrect figures used when calculating ‘insurance gross profit’ for  business interruption cover (which is not the same as your accountants’ figure)  

An example of this last point saw one business with a £55m hole in the cover they required. These are business-ending figures!  

Other gaps are in areas of emerging or specialist risks: regulatory prosecutions;  product recalls; data and cyber losses; losses by fraud & deception; reputational  damage… It is easy to think ‘it won’t happen to me’, or to underestimate the cost  of an incident.  

By getting to know our clients’ operations we can help map out the full impact which often prompts a more urgent discussion! The result isn’t necessarily an  insurance solution – some clients develop controls and contingency plans where there were none before.  

It is easy to think of insurance & risk management as a sunk cost: another drain on ever-challenged budgets that you may never really need (more businesses do not have catastrophic fires than do, after all.) You at least want it to operate when you need it to though.  

With the right partner, insurance can be turned into something that works for your business, protecting your investment, making it more resilient for the future.  

To find out more talk to us at NFU Mutual Preston agency on  01772 735798  

Agent of the National Farmers Union Mutual Insurance Society Limited.