Over the last year, Australian cold store insurance premiums have increased on average between 200 and 400%. One cold store reported 3 premium increases so far this year. Underwriters have justified the hikes by saying that the industry was subsidized for years. Last year while premium income represented 2% of revenue, claims were at 6%, so premiums had to increase. There have been 10 recent fires mainly in bakeries and meatworks, Murray Bridge’s Thomas Foods being the worst, with claims exceeding $350M, but cold stores have been lumped in with processing plants because the use of insulated panel is common to both. Welding next to panel appears to have been the immediate cause of the Murray Bridge fire. 

For years IPCA (Insulated Panel Council Australasia) has been promoting the safety of insulated panel structures through various initiatives including a code of practice for the design, installation and maintenance of insulated structures. A copy of this code is attached.

While adhering to the IPCA code is not mandatory, at least 730 facilities have been built to code following its publication in 2010. While such high profile events including the Grenfell Tower fire in London, especially as insulated panel was involved, have not helped, nor has the lack of knowledge amongst insurance underwriters and brokers around different types of panel, construction methods and the use of fire prevention systems. The current rule of thumb appears to be that if insulated panel represents more than 20% of a structure’s surface area then premiums can be expected to skyrocket. 

US cold stores don’t appear to have the same premium problem. This may be due to industry size, more knowledge around the risks of panel and mitigation methods or possibly from lobbying by the GCCA (Global Cold Chain Alliance).      

The Refrigerated Warehousing and Transport Association (RWTA) is currently organizing a meeting with the Australian Insurance Council to discuss the differentiation of cold storage facilities. It will be dependent on the type of panel used in fire prevention systems and operational practices. However, optimism concerning a positive outcome appeared to be in short supply. The only other option appears to be self- insurance. Perhaps South Africa’s cold and freezer stores are already facing its challenge? Further information on this challenge can be found at: Insulated Panel Council Australasia Ltd – ABOUT