Frost Insurance - Background

Q: How will the frost insurance work?
A: The NFU will be the policy holder on behalf of all growers who, as beneficiaries of the policy, will each receive a certificate of insurance together with a summary of the policy and an insurance schedule at the start of the 2012/13 campaign this September. A copy of the full policy document will also be available on

Q: How will the frost insurance be paid for?
A: The NFU has paid the premium direct to the insurers. The cost of the insurance will now be invoiced to each grower based on their total contracted tonnage and the cost of the insurance which is based on 12.75p/tonne. BS will collect this money on all contracted tonnes on behalf of the NFU using the same method they currently use to collect seed costs.
The NFU and British Sugar agreed to the inclusion of frost insurance in the beet price calculations as part of mid-term review discussions, completed in April 2012. The cost of the 2012 frost insurance premium has therefore been included in the 2013/14 campaign price.

Q: What will the insurance cost?
A: The premium for the insurance for this campaign costs 12.75 pence per insured (approved) tonne. Surplus beet is not included in the cover and does not incur premium costs. This cost has been incorporated into the 2013/14 agreed beet price.
Each grower will see on their individual certificate the value of the sum insured and also the cost of the premium.

Q: How do I pay the insurance premium?
A: The cost of the insurance will be recovered in the same way seed cost is charged to growers currently. This means that for the insurance cost, an invoice will be sent to all growers this autumn. If a grower chooses not to pay the invoice, as with seed payments the cost will be deducted off their first beet payment.
The cost of the insurance for this campaign (2012/13) has been built into the price, through the price model, for the next campaign in 2013/14.

Q: How is the “Agreed Price” on the Certificate of Insurance derived?
A: The agreed price is the weighted average of CTE and ICE prices that British Sugar have agreed to pay you for your delivered beet. If you have more than one contract with British Sugar under the same interests, any ‘Loss of Yield’ will be assessed against the ‘Overall Approved Tonnage’ for all such contracts. However if you have multiple contracts in different interests they will not be aggregated and you will receive separate certificates for each.

Q: Doesn’t having frost insurance mean growers can now decide to not deliver beet but they will still get paid?
A: The frost insurance has been designed to provide an important safety net to growers to protect them from the kind of losses experienced by many in the 2010/11 campaign. However the cover value for each grower is up to only 50% of the value of the beet which has not delivered, it is therefore in all growers interests to deliver as much of their crop as possible.

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