Five steps to maximize insurance coverage for food contamination events

Food Chemical News

PUBLISHED ON: June 25, 2010

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A general counsel for a large food manufacturer recently told me that he's busy all day dealing with corporate governance issues, negotiating mergers and acquisitions, and making sure that all financial reporting requirements are satisfied. But, he added, it's food contamination and product recall worries that keep him up all night.

No wonder. An outbreak of foodborne illness, linked to a product — even mistakenly, even for a short time — can have devastating, if not fatal, effects on a company or its brand.

At Anderson Kill and Olick we've talked to dozens of managers and general counsels at food/beverage manufacturers and retailers about their liability concerns in relation to an outbreak or recall. Usually, by the time we're called in, we don't have to work too hard to convince anyone about the importance of a solid insurance program. Many who have hired us already are embroiled in a dispute with a supplier or an insurer resistant to paying claims, or they have some reason to believe they're about to be drawn in to such a conflict.