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Texas Court treats 124 separate cases of food poisoning as single "occurrence"



In this month's Recall Roundup on the Hunton Andrews Kurth Retail Law Resource blog, Hunton insurance attorneys Syed S. Ahmad and Geoffrey B. Fehling weighed in on a recent food contamination dispute, Travelers Casualty Insurance Co. of America v Mediterranean Grill & Kabob, Inc. (WD Tex. 4 November 2020), which dealt with isolated versus multiple "events" under an insurance policy, a common issue in revocation and pollution-related claims.

In Mediterranean Grill a federal judge in Texas granted an insurer's proposal to treat 124 separate cases of food poisoning as a single "event" under a commercial general liability policy, since all cases stem from the restaurant's alleged contaminated food . During a month period in 201

8, almost 200 cases of food poisoning from salmonella were reported after customers ate at Pasha's Mediterranean restaurant in San Antonio, Texas. The illnesses led to seven separate trials claiming that the restaurant was negligent in manufacturing and cooking, leading to food poisoning. The restaurant sought coverage from its insurance company, Traveler, under an insurance policy with a coverage limit of $ 1 million "per event" and a "total" limit of $ 2 million. its offer to settle the remaining claims for the remainder of the $ 1 million limit per event was rejected. Travelers filed a coverage case to try to limit their total exposure to $ 1 million for a single "event." In opposition, the restaurant claimed that the food poisoning resulted in several "events" because the parties did not know exactly which products were contaminated and the salmonella poisoning seems to have more than one cause.

The court did not agree with the restaurant and ruled that a single "cause" – the alleged contaminated food – gave rise to the restaurant's responsibility for the lawsuits, which meant that there was only one incident. The court also relied on previous rulings which found that a restaurant's "ongoing preparation of contaminated food" supports a single incident, although the exact source of the contamination is unknown. Since further discovery to determine how the food was contaminated would not change this analysis, the court denied the restaurant's request to postpone the draft resolution until after further discovery had occurred. was significant, as travelers would have had to pay more than $ 1.5 million if food poisoning had been counted as 124 separate "events." Similar issues, such as how many deductibles or retentions apply based on the number of "claims", can arise in a variety of pollutants or recall-related disputes. Policyholders evaluating any coverage for these types of exposure should carefully review the key insurance policies related to "per event" or "per claim" to understand how they may affect overall recovery under an insurance policy in the event of a revocable or contaminating event. [19659003]


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