Insurers Face Minimal Impact from U.K. Foot-and- Mouth Outbreak

February 28, 2001

Farmers in Britain and continental Europe are facing extremely serious consequences following the outbreak of the highly contagious foot-and-mouth disease in the U.K. Herds of cattle, sheep and pigs have been slaughtered and burned in 11 different farming regions. On the continent, France, Belgium, the Netherlands and Germany, fearing contamination of local herds, have ordered the destruction off all animals recently imported from the U.K.

The crisis comes on the heels of the ongoing concern over the spread of BSE, or “mad-cow” disease, which has devastated Europe’s cattle industry, and caused a decline of up to 40 percent in beef sales.

While few farmers are insured against the outbreak of such disease, national governments routinely reimburse them for their losses when herds are ordered destroyed to prevent the spread of infectious diseases, but the consequences of the epidemic have spread beyond the farming community.

Horse racing in the U.K. has been canceled until further notice. The Ireland-Wales international rugby match has been postponed, motor rallies have been called off and fishermen have been cautioned to stay out of the countryside. Loss of business and business interruption clauses in insurance policies could be triggered by the cancellations and postponements.

Lloyd’s spokesperson Sarah Pelling said, “It’s too early to make any estimates on what the losses might be, but there will be some claims.” She added, however, that the Lloyd’s market had “very little potential exposure.”|”insurers, face, minimal, impact, from, u.k., foot-and-, mouth, outbreak

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