The food and beverage sector's price of insurance limits has dropped by almost 30 percent in the past two years due to a softening market, according to Marsh.

A new report, Managing liability in the food and beverage sector, surveyed over 230 food and beverage companies across Europe and found that they have responded to the drop by increasing the amount of limits purchased.

Jeremy Moore, practice leader for product risk at Marsh, said: “Companies that have experienced a loss of greater than $5 million don't base their purchasing decisions on just the cost of limits. Since 2000, the amount spent by those that have not experienced a large loss has fallen by $32 million, while that amount varies over the past six-years for those that have.”

Marsh said that even though the market is currently soft, the report showed that when it inevitably hardened many companies would not reduce their amount of limits purchased. Greater scrutiny from the media and regulators would also result in increased product recalls, meaning a greater reliance on insurance, added the worldwide broker. Moore added: “European and national regulators have become much more involved with the recall process. The launch of the General Framework Law for Food Safety Regulation in 2005, which stipulates that regulators must be involved at the first sign of a product being unsafe, has resulted in 60 percent of recalls of all food and non-food related products being government enforced - with major variations between different countries.”