Insurers are letting down the rural business community by failing to offer insurance cover for the impact of foot and mouth disease (FMD).

NFU Mutual said farmers could buy cover that would pay out 25% of their herd’s value if the herd were slaughtered.

But it said this was used to aid cash-flow as full compensation came from the government, both for the slaughtered animals and clean-up costs.

Farms and other rural businesses, such as country tourism, sport and leisure, retailers, agricultural transport and neighbouring farms, cannot claim, even though their businesses may be paralysed or suffer huge drops in trade.

Broker Aon said that only event insurance – which paid out as long as the cancellation was outside the organiser’s control – would cover foot and mouth.

Vivienne Hexter, technical standards consultant at Aon, said all other policies would exclude the disease. She said the current situation was:

• Standard business interruption and denial of access policies only cover damage to insured property

• Non-standard and wider denial of access cover still exclude diseases or health hazards as causes

• Contagious disease extensions cover only human diseases – FMD is not a risk to humans.

Even event insurance had its limitations as it would only pay out if the event was cancelled, Hexter said. And standard cover did not include reduced attendance if travel restrictions were imposed.

Hexter said: “There is very little insurance protection for loss following an occurrence of foot and mouth disease, besides specific cover for farmers and event insurance.”

Although the recent outbreak was contained and over quickly with little additional loss, the 2001 epidemic was estimated to have cost the country £8bn.