Policy director Robert Gooch said: “We take the threat of avian influenza outbreaks extremely seriously and our council of members has voted overwhelmingly in support of the scheme which will begin on 30 December.

“Outbreaks in Germany, France and other European countries show how close avian influenza is so we had to move quickly to get this in place. Free range producers, by the very nature of their businesses of having birds free to roam outside, have a heightened risk of an outbreak.

“New members who join will also be included in the scheme as we are committed to protecting the whole sector, not just the producers we have on our books at present,” Mr Gooch added.

The government takes responsibility for the preliminary cleansing and disinfection of any infected site, but the bill for the secondary cleansing and disinfection is borne by the farmer. This cost could run to as much as £10 a bird.

Insurance broker Scrutton Bland has developed the scheme which will cover BFREPA up to a total of £1m in claim payments during the policy period.

Ed Nottingham, Scrutton Bland’s head of agriculture insurance, said: “This is an innovative and crucial insurance policy for free range egg producers and we know that this is something that the sector wanted and will really value.”

Mr Gooch added that membership subscriptions may be increased next November to take into account the insurance offering, but that BFREPA would front the total cost of the premium for the first year.

Members must disclose their correct bird numbers to qualify and must pay their subscription on time.