Best's Review


Risk Adviser
Are Food and Agriculture the Next Frontier of Climate Change Liability?

Casualty insurance is needed to help manage climate-driven food safety risks and enhance industry resilience.
  • Robert Reville and Adam Grossman
  • December 2021
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The impact of climate change on liability insurance may seem remote outside the energy business. In the 20 greenhouse gas emissions cases against commercial defendants in U.S. courts since 2004, only energy defendants were named in all but one.

Given the role of climate change in causing more severe wildfires, a broader definition of climate change liability includes secondary effects, such as the cases in which electric utilities are held liable for wildfires. So far this, too, remains limited to the energy business.

But the conclusion that only energy industry defendants are at risk would be premature. We see the agriculture and food industries as squarely next in line, with elevated risk of both direct and secondary effects litigation.

Related: California Governor Signs Bill Expanding FAIR Plan to Farmers

In the direct litigation, the primary obstacle to the plaintiffs' success has been the U.S. Supreme Court ruling in American Electric Power Co. v. Connecticut that federal regulation, not federal courts, govern the energy industry's pollution. However, a recent Columbia Journal of Environmental Law article noted that since the federal Clean Air Act doesn't regulate agriculture, litigation over agriculture's greenhouse gas emissions should be allowed to proceed.

Agriculture is a logical target because it's responsible for as much as one-third of global greenhouse gas emissions. Livestock production alone may contribute 20%. Such litigation, according to the article, would reduce greenhouse gas emissions by challenging industry practices such as concentrated animal feeding operations, which hold thousands of animals in confinement before slaughter, a practice that its critics allege is ecologically unsustainable.

Secondary effects litigation is likely to be an even larger problem. The World Health Organization, in a 2019 report, described how climate change will create significant food safety risks. One example is mycotoxins, which are produced by fungi that contaminate grains or other food. The WHO noted that climate-driven elevated humidity, both from more frequent storms and increased temperatures, promotes fungal growth, while increased drought may weaken plants' defenses against fungal contamination, increasing exposure to mycotoxins in food.

Ingesting mycotoxins can cause acute toxicity, including death. Some mycotoxins in food have recently been linked to cancer, birth defects and endocrine disruption. Mycotoxins sometimes remain in food after processing, so a children's breakfast cereal, for example, could retain a mycotoxin that was present in grains.

Related: Lloyd’s Chairman: Insurance Industry Must Make Climate Change a Top Priority

Mycotoxin risk is commonly controlled by applying strobilurin fungicides. Unfortunately, scientists are increasingly concerned about the environmental and health impacts of strobilurins. Research suggests they play a role in antimicrobial resistance and may be neurotoxins. Furthermore, like mycotoxins, they do not always break down completely during food processing, leading to exposure in our diets.

This interplay between elevated food safety risk from microbial exposure due to climate change and increased exposure to pesticides to manage that risk is truly the horns of a liability dilemma that the industry will need to solve with its clients.

The food industry faces enormous challenges driven by climate change as it transitions to more sustainable practices and copes with increasing food safety risks. Just as property insurance is a key part of managing natural catastrophe risk from climate change, casualty insurance is needed to help manage climate-driven food safety risks and enhance industry resilience. Underwriting with knowledge of the science behind the risks and appropriate aggregation management also will keep insurance sustainable.



Best’s Review contributors: Robert Reville is chief executive officer of Praedicat. Adam Grossman is Praedicat’s vice president of modeling and senior scientist. They can be reached at

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