Blog

April 2, 2013

California Court Considers Contaminated Food Product Coverage


California Court Considers Contaminated Food Product Coverage

In Windsor Food Quality Company, LTD. v. The Underwriters of Lloyds of London, 2015 Cal. App. LEXIS 195 (Cal. App. Feb. 6, 2015), the California Court of Appeals considered whether an ingredient obtained from a supplier and used in an insured’s product qualified for coverage as an “Insured Product” under a Contamination Products Insurance Policy.

Windsor Food Quality Company, LTD. (Windsor) manufactured frozen burritos using beef from Westland/Hallmark Meat Company (Westland). After voluntary recall by Westland for possible “mad cow” contamination, Windsor recalled its products that incorporated Westland meat, and incurred recall costs.

Underwriters of Lloyds, London (Lloyds) had issued a policy to Windsor that included coverage for “Accidental Product Contamination” and “Malicious Product Tampering.” The Lloyds policy defined “Insured Products” as “all products including their ingredients and components once incorporated therein of the Insured that are in production or have been manufactured, packaged or distributed by or to the order of the Insured…. [Emphasis added.]” Lloyds denied coverage for Windsor’s claim of “Accidental Product Contamination,” which “would lead to or has led to bodily injury, sickness, or disease of any person, animal or livestock physically manifesting itself within 120 days of its consumption or use.” It was undisputed that no actual injury had occurred from the Westland beef within 120 days. Windsor subsequently sued Lloyds for breach of contract, breach of the covenant of good faith and fair dealing, and declaratory judgment. The trial court granted summary judgment in favor of Lloyds, and Windsor appealed.

The Court of Appeals affirmed the summary judgment. The Court found that the Westland beef was not an “Insured Product,” interpreting the definition of that phrase to require that “Windsor must show there was contamination or tampering with its product during or after manufacture, not before Windsor began the process. In order for a frozen burrito to qualify as an insured product, there must have been contamination or tampering during production, manufacture, packaging or distribution – not because one of its ingredients supplied by a third party was adulterated.” The Court further found that the policy did afford coverage for accidental product contamination for injuries occurring within 120 days of consumption of the product, but that no such injury had occurred.

– See more at: http://www.traublieberman.com/insurance-law/2015/0310/6096/#sthash.77EzXDEw.dpuf

In Windsor Food Quality Company, LTD. v. The Underwriters of Lloyds of London, 2015 Cal. App. LEXIS 195 (Cal. App. Feb. 6, 2015), the California Court of Appeals considered whether an ingredient obtained from a supplier and used in an insured’s product qualified for coverage as an “Insured Product” under a Contamination Products Insurance Policy.

Windsor Food Quality Company, LTD. (Windsor) manufactured frozen burritos using beef from Westland/Hallmark Meat Company (Westland). After voluntary recall by Westland for possible “mad cow” contamination, Windsor recalled its products that incorporated Westland meat, and incurred recall costs.

Underwriters of Lloyds, London (Lloyds) had issued a policy to Windsor that included coverage for “Accidental Product Contamination” and “Malicious Product Tampering.” The Lloyds policy defined “Insured Products” as “all products including their ingredients and components once incorporated therein of the Insured that are in production or have been manufactured, packaged or distributed by or to the order of the Insured…. [Emphasis added.]” Lloyds denied coverage for Windsor’s claim of “Accidental Product Contamination,” which “would lead to or has led to bodily injury, sickness, or disease of any person, animal or livestock physically manifesting itself within 120 days of its consumption or use.” It was undisputed that no actual injury had occurred from the Westland beef within 120 days. Windsor subsequently sued Lloyds for breach of contract, breach of the covenant of good faith and fair dealing, and declaratory judgment. The trial court granted summary judgment in favor of Lloyds, and Windsor appealed.

The Court of Appeals affirmed the summary judgment. The Court found that the Westland beef was not an “Insured Product,” interpreting the definition of that phrase to require that “Windsor must show there was contamination or tampering with its product during or after manufacture, not before Windsor began the process. In order for a frozen burrito to qualify as an insured product, there must have been contamination or tampering during production, manufacture, packaging or distribution – not because one of its ingredients supplied by a third party was adulterated.” The Court further found that the policy did afford coverage for accidental product contamination for injuries occurring within 120 days of consumption of the product, but that no such injury had occurred.

Opinions
About Susanne

One Comment
  1. I Will Win A Battlefield Heroes Item Because my player looks like a hobo compared to othe1

Leave a Reply

Your email address will not be published. Required fields are marked *