A New York appellate court recently upheld a supreme court ruling that an insurer had a duty to defend a manufacturer’s faulty workmanship where it resulted in third party property damage. I.J. White Corp. v. Columbia Cas. Co., 2013 NY Slip Op 2500 (N.Y. App. Div. 1st Dep’t Apr. 16, 2013). In determining the insurer’s… Continue Reading
Category Archives: Insurance Coverage
Subscribe to Insurance Coverage RSS FeedThe Horses Are Off (the Shelves)! Odds Are that the Ensuing Litigation Will Be An Endurance Race
Posted in Crisis Management, E. Coli, False Advertising, Food Manufacturer, Food Recall, Fraud, Horse Meat, Insurance Coverage, UncategorizedRegulators, food distributors, and, of course, lawyers are scrambling to determine the legal and reputational consequences of the still-growing horse meat scandal that recently hit Europe. Amid the recalls, finger-pointing, and consumer outrage at the thought of eating horse meatballs labeled as beef, one thing remains certain: you will have time to bet on many… Continue Reading
Minnesota’s “Impairment of Function and Value” Test Determines Whether Recalled Food Constitutes Property Damage
Posted in "Impaired Property" Exclusion, "Product Recall" Exclusion, "Your Product" Exclusion, Food and Drug Administration, Food Manufacturer, Food Recall, Food Safety, Insurance Coverage, Liability Policy, Policy Exclusions, Property DamageWe often associate food recalls with harmful and contaminated products but manufacturers actually issue recalls for a variety of reasons. Companies sometimes issue recalls because of suspected, but not confirmed, contamination or other quality control issues. Other times, they issue recalls because a regulatory agency disapproves of certain ingredients. When recalls occur without confirmed contamination,… Continue Reading
It’s 2013 – Time to Shape Up!
Posted in Class Action, False Advertising, Insurance Coverage, Nutritional SupplementsAs a new year begins, the Shape Up! coverage litigation draws to an end. On January 2, 2013, the United States Court of Appeals for the Fifth Circuit upheld the judgment of the United States District Court for the Northern District of Texas, holding that Chubb Custom Insurance Company (“Chubb”) had no duty to defend… Continue Reading
Sunland Salmonella Saga Provides a Window to FDA Enforcement
Posted in Food Safety, Food Safety Modernization Act, Insurance CoverageA new year is here, and the food industry remains in a sort of regulatory limbo. Between the FDA’s delay in releasing regulations under the implementation deadlines set forth in the Food Safety Modernization Act (FSMA) and inadequate funding from the government, industry commentators are left to speculate how much the FDA can and will… Continue Reading
E. Coli Outbreak Constitutes A Single Occurrence
Posted in Insurance CoverageIncidents of food-borne illness impact a number of parties, from sick consumers to various commercial entities in the chain of distribution. Many general liability insurance policies cap policy limits on a per occurrence basis. For example, a policy may provide $2 million in aggregate limits but only $1 million in per occurrence limits. The relevant… Continue Reading
Pollution Exclusion Bars Coverage For Contaminated Infant Formula
Posted in Insurance CoverageTHE SCOOP On April 20, 2012, the Virginia Supreme Court determined that a group of property insurers did not owe coverage to PBM Nutritionals, LLC (“PBM”) in connection with its multimillion dollar claim for losses related to contaminated infant formula. PBM is a leading manufacturer of infant formula. When PBM shut down its machinery for a scheduled cleaning,… Continue Reading
Injuries Caused By Contaminated Beef Constitute A Single Occurrence
Posted in Insurance CoverageA food-borne illness outbreak usually results in a large number of claimants and, depending on the scope of distribution of the contaminated product, it can spawn claims in a multitude of jurisdictions. For insurance adjusters and their insureds, a critical question is how to determine the “number of occurrences” in a food contamination claim that results in… Continue Reading
Consumers’ Inability to Shape Up! Does Not Constitute Bodily Injury
Posted in Class Action, False Advertising, Insurance Coverage, Nutritional SupplementsTHE SCOOP On January 30, 2012, a Texas federal judge ordered that Chubb Custom Insurance Company (“Chubb”) had no duty to defend its insured because the claimants in the underlying class action did not allege any “bodily injury” as defined by the policy. The underlying class action lawsuit involved a diet and nutritional product called Shape Up! that purported… Continue Reading
Peanut Distributor Not Entitled to Coverage Under Accidental Contamination Policy
Posted in Contamination Policy, Insurance CoverageThe ripple effects of a food recall up and down the supply chain continue to play out in courts across the U.S. Recalls are not simply a matter of an injured consumer making a claim against the manufacturer of a recalled food item. The complexities reside in the supply chain, as numerous companies are forced… Continue Reading
Burritos Contaminated With Non-Dangerous Bacteria Not Covered By Contamination Policy
Posted in Contamination Policy, Insurance CoverageTHE SCOOP This insurance coverage dispute arose out of a burrito product produced by Little Lady Foods that failed to make it to the market as expected. Prior to shipment to convenient stores, Little Lady had to test its burrito product and equipment pursuant to USDA regulations. Six samples tested positive for the listeria bacteria,… Continue Reading
Fresh Express’ Recall Policy Does Not Cover Spinach Recall Absent Actual Contamination
Posted in Insurance CoverageTHE SCOOP The food industry will remember 2006 as the year of the North American E. coli outbreak caused by fresh-bagged spinach. The FDA issued the broadest advisory in its history regarding a commodity, advising consumers not to eat bagged spinach and recommending that spinach processors take steps to recall the product. Thereafter, the FDA… Continue Reading