8th Circ. Clarifies Coverage Trigger For Food Recall
Law360, New York ( December 18, 2014, 10:37 AM EST) -- Insurance coverage for loss arising from a voluntary food product recall is often contingent upon the extent to which the recalled product creates a public health risk. The Eighth Circuit recently addressed the level of risk required to support coverage, holding that an accidental product contamination policy required more than a possibility, but less than a probability, that the recalled mislabeled food product would cause physical symptoms of bodily injury, sickness, disease or death. Policyholders should be aware that this standard may lead to a jury question, which may encourage settlement in coverage disputes but also may be a reason to re-evaluate and clarify policy language. The Eighth Circuit's decision also provides helpful guidance to policyholders seeking to calculate and prove lost gross profits relating to a product recall. . . .
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