Rejection Insurance – How to underwrite?

Rejection Insurance :

It cover for rejection by government authorities due to product failing to meet standard set for importation. Cover requested for foodstuffs, particularly meat and seafood.

Essential Information :

The following is essential information to be obtained:

1. Details of product(s). For meat this means the type of meat (g. beef, mutton, veal etc.) and type of shipment e.g. cuts in cartons or carcass.
2. Countries to which product being exported or, if imports, from which countries.
3. For exports: What are regulations of importing country? Is product processed, prepared and packed in accordance with regulations? Any import quotas in place?
4. For imports: What are the regulations? Is product processed, prepared and packed in accordance with regulations? Import quotas? Survey report on processing premises.
5. Experience of client in importing/exporting product concer
6. Previous claims/insurance experienc
7. Processing establishment numbers from which produce sourced (exports)

Underwriting Considerations :

The following should be considered when underwriting rejection risks:

Rejection can be triggered by:

• ♦  Contamination of meat due to chemical treatment of fodder, grazing land.
• ♦    Poor quality control at processing plants resulting in ingesta, bone chips, faeces etc. being found on inspection. Records of processing establishment will determine frequency of testing by U.S. authorities for exports to USA. Known as skip lot testing.
• ♦    As a general rule, the smaller the animal the worse the risk; e.g., mutton worse than beef and, goats/rabbits a worse risk again, due to difficulty in skinning and cleaning without leaving offensive material in product. Goat/rabbit to USA/Canada is a major risk.
• ♦    Wild animals (as opposed to farm animals) are far more susceptible to chemical/bacterial contamination.
• ♦   Enhanced microbiological/chemical testing on exports to USA. HACCP (Hazard Analysis Critical Control Path) controls mandatory for establishments shipping to USA post 1998.

Insurance Conditions :

1. Rejection Clauses 1 These exclude pre-slaughter risks such as chemical contamination, E-Coli, Salmonella etc.
2. Limited extended rejection cover available for selected clients to “buy back” pre- slaughter risks for shipments to USA/Canada only.

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