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The property facultative market is facing another sizeable hit from a US factory fire following this week's blaze at the the Patrick Cudahy meat processing plant in downtown Milwaukee in a Marsh-placed programme.
The fire started on Sunday night as more than 130 firefighters battled the blaze at the Patrick Cudahy Inc plant in Cudahy, a suburb sevem miles south of downtown Milwaukee.
Inside FAC understands that the plant, which is worth some $300mn, is covered as part of a $400mn programme on behalf of the parent company of Patrick Cudahy, US conglomerate Smithfield Foods.
The programme, which renewed on 30 April, has excess layers placed in the London market- though losses from the fire are not expected to eat into these layers to any great extent, according to market sources.
Patrick Cudahy President William Otis said on Wednesday that the damage could total more than $50mn, based on the value of lost equipment and supplies as well as damaged structures. But he stressed the assesment is at present a "ballpark figure" until the plant can be properly assessed.
"It could be in excess of $50 million," he said. "We don't know."
Furthermore, any business interruption claims are likely to be minimal. "If all goes well, production in some unaffected areas could restart next week,", Otis added.
Smithfield Foods also said in a statement it did not expect production capacity to be substantially curtailed: "Currently, we do have available capacity at other Smithfield facilities and will be able to make up any product shortfalls in short order, minimising any disruption to our customers".
Thankfully there were no injuries as a result of the fire, though the incident could have been more serious as authorities warned thousands of area residents to temporarily evacuate because of the possibility of an ammonia explosion.
By midweek 350 staff at the plant were back at work in unaffected areas.
The Cudahy loss is the second serious US industrial loss to hit the market in less than a month, as it follows June's explosion at ConAgra's 'Slim Jim' meat processin plant in North Carolina, which sources have indicated could be as high as $600mn once business interruption losses are accounted for.