Frost insurance – how does it work and what does it cover?

27 January 2023

An image of a snowy field with a hedge and trees

Frost insurance is paid for by British Sugar and is unique to sugar beet. The policy is provided by the NFU, through NFU Mutual, as a safety net for significant losses if a severe frost event occurs. It applies to all sugar beet CTE. Read on to find out the answers to your questions on exactly how the policy provides cover.

What do I need to do to claim?

Nothing, NFU and British Sugar are dealing with the claim.

All growers who had not completed their harvest by midnight on 14 December and submitted the Crop Area Declaration in time to receive a Frost Insurance certificate from NFU Mutual, have automatically had a valid claim lodged with NFU Mutual.

Why do I need insurance?

The scheme would only be operated by the insurers if all growers participated. As risks of campaigns are spread by some growers delivering late, allowing others to deliver early, then the NFU considers it reasonable for all growers to participate in the scheme and the policy has been designed on this basis.

What does this cover?

Only the contracted beet CTE is covered for losses caused by an insured frost event, provided adequate area is planted. If the area planted multiplied by the grower’s five-year average yield is lower than the contracted tonnage, then the insurer will only cover this lower insured tonnage.

For growers that have not grown sugar beet for over five years, cover will be based on the factory five-year average yield.

What does the cover relate to and what are the conditions for paying out?

The cover is designed for early and severe frosts, such as those experienced in 2010/11 when a damaging frost event occurred early in the season.

The insurers have defined a severe frost event as the average minimum temperature of -4°C or lower for a rolling 10-day period up to and including 30 January.

Once a ‘trigger’ frost event has occurred, pay-out under the policy for each beneficiary will be calculated following the end of the campaign.

British Sugar and NFU will deal with the claim and British Sugar will ensure payment is made to your nominated bank account

How is pay-out calculated?

In order for a pay-out to be made, the farmer has to have incurred a loss that is higher than the deductible which is set at 15% of the Insured (Approved) Tonnage. This is in order to filter out the natural and normal volatility in yield.

This deductible should avoid potential for many small losses and reduces the administrative costs and the insurance premium.

Loss that falls between 15% – 30% will be paid at the full contract rate (£27). Loss higher than 30% will be paid at a 50% rate of full contract value.

Does the policy only cover beet which has not been lifted?

The cover payable in the event of a frost occurrence will be calculated on the total beet not delivered by the end of the campaign under your contracted tonnage CTE.

There is no requirement for losses to have occurred in the ground only, and stored beet is also covered. Equally, once the frost trigger has been reached, any damage from subsequent frosts, in the same campaign, will also be covered.

How is the cost of insurance covered?

The NFU have contracted the insurance using NFU Mutual to administer the scheme. British Sugar pays the premium with no cost to growers.

What happens in the event of a drought or non-frost event occurring?

The insurer has the right to reduce the yields to take into account known events. This year due to the drought event in August, yields have been reduced by 7% from those shown on certificates.

When will I know if the policy has triggered?

On 17 January, the insurers confirmed that the 2022 policy triggered on 15 December. You will have received an email from British Sugar confirming this.

Therefore, all growers who had not completed their harvest by midnight on 14 December and submitted the Crop Area Declaration in time to receive a Frost Insurance certificate from NFU Mutual, have automatically had a valid claim lodged with NFU Mutual.

If I opt for Yield Protection in 2023, will that affect my eligibility for frost insurance next year?

No, whether you opt for Yield Protection in 2023 or not, your eligibility for frost insurance next year will be unaffected.

Key things to know:

  • The policy will trigger for everyone if any one of the weather stations listed hits the required temperature. These are Marham, Wattisham and Waddington.
  • You do not need to prove that yield loses were caused only by frost or separate out causes. If the policy triggers and you are eligible for payment, you will be covered based on tonnes delivered.
  • If you completed deliveries on a contract prior to the date the policy triggered, you will not be eligible for payment.
  • You do not need to claim individually. This will be handled by NFU and British Sugar on your behalf.
  • If you failed to return your crop declaration by 14 September, you will not be covered.
  • If you are eligible for payment from both Frost Insurance and the VYAF, the two will be netted out.
  • The overall fund this year is £15m based on area, in the event of claims reaching beyond this, claims will be pro-rated.
  • Any market bonus payout due will remain on tonnes delivered so it is important to deliver as much as possible.
  • The contract price for majority of growers will be £27 used for the frost insurance. For the small amount of growers on futures contract the average contract price will take into account the futures element using British Sugar’s average price. In all cases this brings the average price to at least £27 or above.

Contact us

You should have received a certificate of insurance from NFU Mutual confirming your covered tonnes under the policy. If you are unsure, please contact us and we can confirm your coverage.

You can email our team at [email protected] or contact us via our helpline on 0370 066 1974.


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