GMOs You Say Potāto. I Say Potäto.

Emerging & Complex Insurance Claims Forum

February 25-26, 2016

•  Casey Roberts, ACSR, AFIS, CIC •  Laurus Insurance Consulting •  www.laurusinsuranceconsulting.com •  Ph: (707) 477-0913 •  casey@laurusinsuranceconsulting.com

Speaker

•  Genetically Modified vs. Hybridized – Similarities & Differences

•  Possible Effects on Insurance Products – Covered or Not

•  Types of Claims – Those Already Seen & Those Still To Come

Today’s Three Areas Of Focus

•  Definitions: •  The result of interbreeding between two animals or plants of different taxa (a

species or genus) •  Crosses between populations, breeds or cultivars of a single species

Hybrids

www.sciencedaily.com

•  Offspring of the hybrid are sterile

•  Thereby preventing the movement of genes from one species to the other

•  They display traits and characteristics of both parents

Hybrid Facts

www.sciencedaily.com

•  GMOs are foods derived from organisms whose genetic material (DNA) has been modified in a way that does not occur naturally; eg, through the introduction of a gene from a different organism

•  Genetically modified organisms, transgenics, genetically engineered

Genetically Modified Organisms

World Health Organization

•  Like hybrids, GMOs are also sterile

•  CONCERNS (not facts at this time): New allergies •  Unknown concerns

GMO Facts

•  With classical breeding – reproduction can only occur between closely related species…EG: corn to corn or closely genetically related species

•  With GE – any gene from any organism can be transferred to another organism…EG: DNA from a bacterium such as bacillus thuringiensis (Bt) transferred to corn or cotton.

How Is GE Different From Classical Breeding

Current GMO/GE Uses

Hybrid Examples

Top Ten GMO/GE Crops In U.S.

•  10 Rice

•  9 Rapeseed

•  8 Tobacco

•  7 Alfalfa

•  6 Wheat

•  5 Tomato

•  4 Potato

•  3 Cotton

•  2 Soybeans

•  1 Corn

The Ultimate GMOs ? ? ?

•  General Liability responds to “Bodily Injury” (BI) & “Property Damage” (PD)

•  BI means bodily injury, sickness or disease sustained by a person, including death resulting from any of these at any time

•  PD means physical injury to tangible property, including all resulting loss of use of that property…

•  PD means loss of use of tangible property that is not physically injured...

Insurance Product Responses?

•  General Liability - beware the “pollution” exclusion.

•  “Pollutants” mean any solid, liquid, gaseous or thermal irritant or contaminant, including smoke, vapor, soot, fumes, acids, alkalis, chemicals and waste. Waste includes materials to be recycled, reconditioned or reclaimed.

•  Did the “pollutant” cause the BI or PD?

Insurance Product Responses?

•  Commercial Property forms (both Property & Business Income) rely upon the covered “causes of loss” to determine the applicability of coverage or not.

•  Under “Special Form” all losses are covered except those that are specifically excluded.

•  Under “Basic” and “Broad” forms, only those items addressed as “covered” will respond to a loss.

Insurance Product Responses?

•  Commercial Property cannot find coverage in the coverage form.

•  Business Income if there has been no “direct damage” to property, then Business Income coverage would not apply.

Insurance Product Responses?

•  Mechanical/Equipment Breakdown coverage requires “breakdown” for coverage to apply.

•  “Breakdown” means the following direct physical loss that causes damage to “Covered Equipment” and necessitates its repair or replacement:

–  (1) Failure of pressure or vacuum equipment; –  (2) Mechanical failure including rupture or bursting caused by centrifugal force; or –  (3) Electrical failure including arcing;…

Insurance Product Responses?

•  Pollution Coverage essentially every insurer writes their own coverage form.

•  Might we find coverage?

Insurance Product Responses?

•  Past losses and/or lawsuits centered around:

•  Misuse of seed by farmers (Bowman v. Monsanto Co.) patent infringement

•  Actions against Syngenta include trade sanctions applied to exported GMO crops and against Monsanto in regards to their Roundup Ready Wheat

Previous Claims/Lawsuits

•  Vermont’s Act 120 – effective July 1, 2016 – requires that any food offered for sale must be labeled a GMO if it is “entirely or partially produced with genetic engineering.”

•  It also prohibits such food from being labeled “natural” and sets out statutory damages of not more than “$1,000 per day per product”.

•  Issues being put forth are 1st Amendment, 5th Amendment and the Commerce Clause as well as Federal pre-emption by statute.

Labeling Lawsuits (current)

•  Genetically Modified vs. Hybridized – Similarities & Differences

•  Possible Effects on Insurance Products – Covered or Not

•  Types of Claims – Those Already Seen & Those Still To Come

What We’ve Covered

THANK YOU