Liability Insurance Contributing Columnist


Recovering From An Insurance Non-Renewal

3 Tips to Success

Jen Pino-Gallagher
Director of Food & Agribusiness Practice
M3 Insurance

March 1, 2019


Zig Ziglar was famously quoted as saying “Every choice you make has an end result.”

True to Mr. Ziglar’s words, every single management decision that you make in your dairy plant sets your operation in a certain direction. Each decision may have unintended consequences, some minor, others serious.

One consequence explored in this article is the possibility of your insurance carrier denying your policy renewal. There are countless reasons why an insurance company might non-renew a client. Some non-renewal reasons are obvious and completely controllable, such as non-payment of premium. But there are other reasons that may surprise you.

A few reasons an insurance company might choose to non-renew a dairy processing client and tips on what to do if you find yourself in this unfortunate situation follow

1. You Don’t Take Food Safety Seriously
Insurance companies can be cautious in providing general liability coverage to dairy processors because of the myriad of dangerous pathogenic organisms that can be in raw milk. Considering how highly regulated the dairy industry is, it is difficult to think that a dairy processor would not put significant efforts and resources into their food safety, allergen control, sanitation, etc. However, it does happen.

Insurance carriers want to see a comprehensive food safety program. Even if your food safety plan looks great on paper, an insurance company will have grounds for non-renewal if they determine there is an increased probability of excessive claims because your food safety protocols are not actually being followed

2. Your Insurance Company No Longer Likes Food
Just like changing consumer tastes can impact the food industry, an insurance company’s “appetite” can also change. Many factors can contribute to a change in market appetite, including: major claims in a sector, shift in a company’s strategic direction or inability to obtain reinsurance for certain classes of business.

It’s also not uncommon for an insurance company to change their stance on providing coverage for certain sectors. For example, some insurance carriers are now shying away from providing coverage to companies growing and distributing green leafy vegetables. Many A+ rated insurance carriers see dairy processors as perfect clients while other carriers, not as keen on food, are exiting the market.

A broker who specializes in food related coverages will know exactly which insurance companies are interested in food and which are not. The right broker partner will seek to pair a dairy operation with an insurance company that is committed to dairy for the long haul

3. High Frequency or Size of Claims
When an insurer targets and desires to insure an industry sector, it’s based upon actuarial science. As a result, they have plenty of actuarial data to rely upon to predict the probability of losses. Predicted loss experience is adjusted based upon a particular rating basis such as annual sales or payroll

If an insurance carrier continually pays out high dollar claims on a particular account, they typically attribute that high claim count trend to lack of management control or poor training practices within the organization. Eventually, they will cut their losses and drop the account. So whether your plant is large or small, if your frequency or severity experience is outside of the insurance company’ expectations in relationship to your rating basis, you may find your operation in non-renewal.


In Wisconsin, like many states, insurance carriers are required to notify an insured of non-renewal at least 60 days prior to the renewal date.

1. Find out the reason for the non-renewal
Usually, the non-renewing underwriter gives notice to the agent prior to sending the letter, so hopefully you weren’t blindsided. If you were, an immediate call to your broker as well as the insurance carrier should be made to find out the specifics of the non-renewal.
Sometimes, the non-renewal notice will include a reason, but often there is little or no explanation. If corrections can be made to overcome the reason, it is possible the insurer may be willing to rescind the non-renewal.

This is important because when your broker is shopping for a replacement insurer, every application asks a question similar to the following: “Has the insured ever been non-renewed by a previous insurer?” The broker is required to disclose previous non-renewal status to the new prospective insurance company

2. Get a new plan, Stan
It is your broker’s role to help you identify and “market” your operation to potential insurance carriers. Your broker should assist and guide you if you have been non-renewed — regardless of the reason. You should meet as soon as possible with them to discuss his or her plan for helping you find new insurance coverage. Ask for a specific timeline as well as a list of insurance carriers that the broker will approach.

Ideally, your broker should suggest potential resources and insurer companies that can help you improve your situation, those with an expertise in and appetite for the food industry. You may also need to interview other brokers who specialize in food coverages to ensure your organization gets the best insurance coverage possible

3. Get your operations and management in order
Management commitment to safety starts at the top of any organization. A non-renewal can serve as a wakeup call and an opportunity for management to revitalize good manufacturing practices.

Work with your broker to update their existing risk management plan for you in order to prioritize the main areas of change needed for improvement. Your broker can also use this plan to help tell the story of your positive management efforts to prospective underwriters.

Non-renewal does not have to be a business ending situation; rather, it can drive you to create a best-in-class dairy operation


Jen Pino-Gallagher is director of the food and agribusiness practice at M3 Insurance. M3 Insurance offers insight, advice and strategies to help clients manage risk, purchase insurance and provide employee benefits. The views expressed above do not necessarily reflect those of Cheese Reporter. You can contact the columnist by calling (800) 272-2443, or by visiting


For more information, call (800) 272-2443 or visit


Jen Pino-Gallagher

Jen Pino-Gallagher is a Director of Food & Agribusiness Practice at M3 Insurance. M3 Insurance offers insight, advice and strategies to help clients manage risk, purchase insurance and provide employee benefits.
For more information, call (800) 272-2443 , visit

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