Food and Beverage Manufacturers – Use of GMO Ingredients Might Impact Your Insurance Coverage
The USDA’s National Bioengineered Food Disclosure Standard (GMO labelling standard) has been implemented as of January 1, 2020 with a mandatory compliance date of January 1, 2022. These guidelines follow Congress’ passage of a law in 2016 to include a disclosure of bioengineered food in the Agricultural Act of 1929. While this rule is intended to provide a uniform national standard for disclosure of information to consumers about the inclusion of bioengineered ingredients in their food, the rule includes several exceptions for both types of food and types of manufacturers that must disclose.
Genetically modified (GMO), or bioengineered, foods have been available since 1996. The list of approved foods (like corn, soy beans, squash, papaya, canola, alfalfa, sugar beets, potatoes, and apples) has grown over time, and it appears this list will continue growing. Wheat is not yet approved, but there have been several incidents reported of GMO wheat entering the U.S. food supply in recent years. Until now, there has been no requirement to label this food.
It appears that no adverse health effects among consumers of GMOs have been found as of yet. But as the labeling requirements become mandatory, there is increased risk of incurring liability if a consumer were to be injured by the ingestion of GMO ingredients.
This is why you would want to have liability coverage in place. Just in case. However, insurers of food and beverage manufacturers are starting to hedge their bets. You might see your insurance carrier including exclusionary language for liability arising out of “genetically modified organisms”. Your broker should make every attempt to remove this exclusion. If it cannot be removed, other risk management techniques, such as contractual risk transfer or supplier due diligence, should be considered.