A recent First Circuit ruling underscores that a well-negotiated insurance policy can cover claims for which state law has no remedy. In Starr Surplus Lines Ins. Co. v. Mountaire Farms Inc., Starr Surplus Lines Insurance Company insured AdvancePierre Foods Inc., a maker of ready-to-eat lunches and sandwiches. In 2015, a string of salmonella outbreaks were linked to chicken in AdvancePierre’s products, prompting AdvancePierre to recall more than 1.7 million pounds of chicken. The recall cost AdvancePierre over $10 million, which Starr covered under AdvancePierre’s product-contamination policy.

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Policyholders facing any type of products liability scored a win in a recent decision from the District Court for the Northern District of Illinois.  The court found that an insurance company must defend its insured against claims arising out of a recall while simultaneously funding the insured’s affirmative claims for recovery.

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Attorneys Syed Ahmad and Jennifer White contributed to the Hunton Retail Law Resource’s “Recall Roundup” for the month of March with a discussion a new cases in the world of recall-related insurance coverage litigation, including a new case filed by a policyholder against its insurance broker alleging that the broker was liable for misrepresentations in

Product recalls are on the rise in many industries. As regulatory and consumer protection standards are getting tougher, product supply chains are becoming more complex. This increases the risk of errors, defects and contamination at all levels of operation. Too often, these problems do not manifest themselves until after a product hits the market. All of this can lead to staggering expenses for food and product manufacturers facing the risks and realities of product recalls.

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Attorneys Syed Ahmad and Jennifer White contributed to the Hunton Retail Law Resource’s “Recall Roundup” for the month of February with a discussion of Starr Surplus Lines Insurance Company’s suit against CRF Frozen Foods, LLC.  Starr seeks to rescind the a product contamination policy based on allegations that, during the insurance application process, CRF failed to disclose “violations” identified by Washington State and federal inspectors which, Starr claims, were likely to give rise to CRF’s 2016 recall of frozen vegetables.  See Starr Surplus Lines Ins. Co. v. CRF Frozen Foods, LLC, No. 1:17-cv-01030 (S.D.N.Y. Feb. 10, 2017). Starr’s suit comes on the heels of its success before the Third Circuit earlier this year, when the court affirmed Starr’s rescission of the accidental contamination policy issued to Heinz.  For more on that case, click here.

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