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Risk in Context

British Retail Consortium Standard Issue 8: Recall Insurance Value

Posted by David Tate 05 March 2019

With food recalls or food scares rarely out of the headlines in recent years, the importance of traceability has never been greater. A food contamination event can be damaging to the reputation, balance sheet, and ultimately the survival of the business.

The latest revision to the British Retail Consortium’s (BRC) Global Standard for Food Safety, which was issued on 1 August 2018, with the first audits being conducted from 1 February 2019, seeks to address the root causes of non-compliance in promoting a food safety culture.

How does Issue 8 potentially support your Contaminated Product Insurance (CPI)?

Like Issue 7, Issue 8 includes a number of requirements insurers look for in a business (albeit some have slightly changed):

  • An effective Hazard Analysis and Critical Control Point (HACCP) programme.
  • A fully implemented food safety and quality manual.
  • The ability to demonstrate an effective supplier approval and monitoring system.
  • Traceability programme.
  • A plan on how they would manage incidents effectively and enable the withdrawal and recall of products should this be required.

Issue 8 however, also covers a number of new items – some of which will change the nature of the risk, particularly in the eyes of the insurer.

Food Safety Culture

The addition of a clause which introduces food safety and quality culture as a compulsory requirement rather than a voluntary requirement will be welcomed by insurers. This will ensure that every employee understands their responsibility for food safety, and that building a safety culture is on meeting agendas throughout a business to demonstrate ongoing improvement. Businesses also need to put into place a confidential reporting system to prevent internal issues from erupting into headline news.

Demonstrating the process/activities in place to support Food Safety Culture will be viewed positively by CPI insurers.

New Requirements for Food Defence

Food Defence and the potential for deliberate malicious contamination from both internal and external sources will now need to be risk assessed, documented, controlled, and monitored. This has resulted in a number of food safety consultants offering services to undertake Threat Assessment and Critical Control Points (TACCP) and Vulnerability Assessment and Critical Control Points (VACCP) sessions to assist businesses in this area.

It is important to consider that CPI insurers typically offer a bursary that can be spent on developing Food Defence plans as they assist in the mitigation of the risk they are insuring.  

Cyber Security

There is now a need to demonstrate a procedure to report and manage a failure of, or attack against digital cyber security. For those who currently purchase CPI, it is important to seek confirmation on whether the policy would respond to a cyber-enabled contamination or tampering event. Not all insurers are able to cover this exposure.

This provides further justification for purchasing cyber insurance in addition to covering breach and technology related loss of revenue.

Environmental Monitoring

The inclusion of a new section on environmental monitoring is another shift towards preventative rather than reactive control. This requires risk-based programmes to be in place for pathogens or spoilage organisms for all production areas with open and ready-to-eat products. The expectation is that for any pathogen outbreak, environmental monitoring records will enable investigators to identify both the original root cause and the exact site.  

Evidencing risk-based environmental monitoring programmes will become an important pre-renewal activity.

Changes to the Standard reinforce the necessity to put processes in place to mitigate risk that will also be viewed favourably by CPI insurers.





David Tate