A.M. BestTV: Inland Marine Insurers Respond to Food Safety Modernization Act

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OLDWICK - JULY 13, 2016 02:28 PM (EDT)
In this ^A.M.BestTV episode from the annual meeting of the Inland Marine Underwriters Association, attendees highlight how trucking and cargo carriers are facing greater risk exposures as new food safety laws reduce opportunities to salvage shipments. Click on http://www.ambest.com/v.asp?v=foodsafety716 to view the entire program.

“The way that cargo insurance is written is going to have to change,” said Tiana Cain, vice president, Central Analysis Bureau.

The Food and Drug Administration’s implementation of the Food Safety Modernization Act is the most sweeping reform of food safety laws in more than 70 years. The new rules are impacting the trucking industry and the insurers that protect them from liability.

“The new rules can make the motor carrier liable for more than just physical loss or damage,” said Rich Soja, senior vice president, Inland Marine Underwriting, Tokio Marine Management, Inc. “If the paperwork is not tracked correctly, or drivers have not been trained properly, then a clever plaintiff’s attorney could try and get at those issues. The claim would be food adulteration, even though there isn’t any evidence of loss or damage.”

“The Federal Government has established a new ruling that if a load is considered adulterated, it can no longer be salvaged. It cannot be utilized for anything; it must be destroyed. Thus, a potential partial loss is now a total loss,” explained Tyler Van Spanje, regional president, OneBeacon Insurance Group.

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