Food and Drink - July/August 2011 - (Page 14)

food law: by marialuisa s. gallozzi and brianne bharkhda Are You Covered? Specialty insurance can help manage recall-related losses as long as you’re aware of the fine print. happen before a specialty policy will be triggered. In general, these insured events are: • Accidental contamination; • Malicious product tampering; • Adverse publicity concerning contamination or tampering; or • Government recall. Specialty policies may provide some or all of these coverages. Accidental Contamination Under a policy providing coverage for accidental contamination, a policyholder must determine whether the policy responds only when there is proof of actual contamination or also when there is suspected contamination. The more restrictive actual contamination requirement can present two problems. First, because a policyholder must act quickly to protect public health, it might not have the opportunity to confirm that actual contamination has occurred before making the decision to recall the product. Second, the actual contamination language does not track the recall classifications of the Federal Drug Administration (FDA). FDA’s definition of a Class I recall – available on its website – which is its most serious recall category, is a situation in which there is “a reasonable probability that the use of or exposure to a violative product will cause serious adverse health consequences or death.” A policyholder could find itself in the position of recalling on its own initiative or being asked by FDA to recall based on this “reasonable probability” standard, but not being able to satisfy the definition of “accidental contamination” under its specialty policy because it cannot prove its product was W With the frequency of costly product recalls on the rise, many companies have considered purchasing specialty recall coverage to secure coverage for certain recall-related losses that are often excluded from general liability and property policies. Specialty coverage first appeared in the late 1980s, following the Tylenol tampering incident, to fill this niche. Since that time, the market for specialty coverage has grown to $350 million to $550 million in premiums. This article provides an overview of those specialty products. What triggers a specialty policy to respond? There is considerable confusion among policyholders about the insured events that must 14 food and drink • july/august 2011 •

Table of Contents for the Digital Edition of Food and Drink - July/August 2011

Food and Drink - July/August 2011
News a la Carte
Consumer Trends
Social Media 101
Strengthening Brands
Food Law
Producers: Hidden Pandemic
Independent Distillers
S. Martinelli & Co.
Wyandot Inc.
Berto’s Gelato & Sorbet
Gills Onions LLC
Neri’s Bakery Products Inc.
Ramar Foods International
Banks Holdings Ltd.
Leclerc Foods USA Inc.
Mariani Packing Co. Inc.
Sam A. Lupo & Sons Inc
Faribault Foods Inc.
Suiza Dairy Corp.
Sunset Farm Foods
Vanns Spices
Berner Food & Beverage Inc.
Cajun Specialty Meats Inc.
Cristalia Premium Water
Green Organic Vegetable Inc.
Vande Bunte Eggs
Motivatit Seafoods LLC
Navarro Pecan Co.
Alpine Meats
West Liberty Foods LLC
Wilber Packing Co. LLC
Restaurants: Tax Incentives
Cheeburger Cheeburger Restaurants Inc.
Famous Famiglia
Grand Traverse Pie Co.
HuHot Mongolian Grills LLC
Glacier Restaurant Group
Jake’s Wayback Burgers
Original Tommy’s World Famous Hamburgers
Sam & Louie’s Pizzeria
Flippers Pizzeria
Larry’s Giant Subs
Mario’s Pizza
Shake’s Frozen Custard
The Fish Market
Distributors: A Package Deal
Diaz Foods
Arista Industries
Columbia Distributing
Allied Specialty Foods
Fresher Than Fresh
Golden Valley Industries
Lancaster Foods LLC
Milne Fruit Products
Retailers: SBA at the NRA
Cooke’s Food Store
Gulf Island Shrimp and Seafood
New Leaf Community Markets
Three Things

Food and Drink - July/August 2011