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APAL: Grower input sought to reduce grower insurance costs
Fruit Growers Tasmania | Wednesday, 9 October 2019, 11.55am
APAL are asking for industry input as they explore ways to help growers, cool store operators and packing sheds tackle rapidly rising insurance premiums across the sector.
APAL say one option, a Discretionary Mutual Fund (DMF), is shaping up as a potential winner across the apple and pear sector, providing an effective risk-management structure to benefit industry and replace traditional insurances.
"We’ve been alerted to the rising cost of insurance for industry members with cool storage facilities who have EPS insulation, or sandwich panelling. Through investigation we found all EPS-related insurance coverage falls into the same hard-to-place risk category which has led to the opportunity to determine the feasibility of a self-funded insurance replacement.
A DMF is set up to benefit members and because the fund would be owned by industry, it is not viewed as taxable revenue which offers an effective tax structure under the principle of mutuality.
“There are also additional stamp duty and Fire Services Levy related-savings to be made and as this is a long-term investment there is the potential to give back to industry in terms of future contributions, training programs and industry improvements.
To assess the feasibility of the DMF model, apple and pear growers, cool store operators and packers across the country are being asked to share information about their existing insurance practices.
"Through understanding the scope of current insurance costs, the type and value of claims being made, our experts at KJ RIsk Group will be able to determine whether we have enough scale as an industry to get something like this off the ground," explained APAL’s Manager, Future Business Richelle Zealley at FGT's apple industry workshop at Grove
"I encourage everyone to participate in the feasibility study which closes Friday, 22 November 2019. "
