PRESENTED FEB. 25, 2016

1. GMOs
You Say Potāto. I Say Potäto.

2. Emerging & Complex
Insurance Claims Forum
February 25-26, 2016

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

4. • 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

5. • 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

6. • 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

7. • 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

8. • Like hybrids, GMOs are also sterile
• CONCERNS (not facts at this time): New allergies
• Unknown concerns
GMO Facts

9. • 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

10. Current GMO/GE Uses

11. Hybrid Examples

12. 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

13. The Ultimate GMOs ? ? ?

14. • 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?

15. • 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?

16. • 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?

17. • 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?

18. • 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?

19. • Pollution Coverage essentially every insurer writes their own coverage
form.
• Might we find coverage?
Insurance Product Responses?

20. • 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

21. • 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)

22. • 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

23. THANK YOU