Big insurer refuses GE farm cover

By RUTH BERRY, political reporter

New Zealand's second-biggest insurer, Vero, will not cover farmers for liability against damage or injury from the use of genetic modification technology.

Green Party co-leader Jeanette Fitzsimons warns that other insurance companies are likely to follow suit and says the decision reveals "just how big a risk insurers believe the GE industry to be".

"The combined result of the liability regime and the lack of insurance is that the full risk for any GE organism that goes wrong will be borne by the victim."

Environment Minister Marian Hobbs, Federated Farmers and the Insurance Council agreed that other companies would follow the lead set by Vero, formerly Royal & SunAlliance, in refusing cover.

But they played down the significance, saying it had been predicted and simply reflected the newness of the technology.

Vero informed its brokers in a memo this week of the decision to include the exclusion in farmers' liability policies. The memo was released by the Greens yesterday.

The moratorium on the commercial release of GM crops will be lifted at the end of next month.

"We perceive that the use of genetic modification technology in farming will present liability risks that we do not wish to insure," the memo said.

The exclusion meant farmers would not be covered for personal injury or damage to property directly or indirectly caused by:

* "The presence on any premises of, or the production of or supply of any GMO [genetically modified organism] or any other material that has been genetically modified where liability may be directly or indirectly attributed to the genetic characteristics of such organism or material."

* "The spread of or the threat of spread of any GMO characteristics into the environment or any change to the environment arising from research into, testing of or production of GMOs or other material."

Ms Fitzsimons said the combination of lack of insurance and the Government's strict liability regime meant people were liable for GM damages only if they broke the law, which would be hard to prove.



Ms Hobbs said insurance was based on past history.

"There is no past history in New Zealand and limited information elsewhere in the world for GMOs."

It was not unusual for the industry to be conservative about covering something like a GMO until it had better information about the sort of financial exposure it might carry.

The liability regime being introduced in the New Organisms and Other Matters Bill would strengthen incentives to comply with the Hazardous Substances and New Organisms Act.

Anyone who caused injury or damage through use of a GMO could be held liable whether or not they were insured, said Ms Hobbs.

If there was any possibility of significant harm to the environment or human health, the expert independent regulatory authority, Erma, would not approve an application for release in the first place.

Insurance Council chief executive Chris Ryan said it was likely, as the Greens said, that other companies would follow Vero, but this was not necessarily a long-term stance.

Insurance companies overseas were beginning to offer GM protection and the same thing would probably happen in New Zealand.