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Hartford wants court to determine whether peanut company should pay claims for salmonella


February 6, 2009   by Canadian Underwriter


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The Hartford Casualty Insurance Company has filed a motion in a U.S. District Court against the Peanut Corp. of America (PCA) seeking declaratory judgement on whether or not it will have to pay the claims arising from a nation-wide salmonella outbreak.
The motion for declaratory judgement was filed in the U.S. Western District Court for Western Virginia, Lynchburg division.
Suits have been filed against PCA since late 2008. Plaintiffs are alleging that ingestion of peanut products from the plant have resulted in salmonella poisoning, and in some cases death.
The sums being sought by the plaintiffs were not detailed in the complaint filed by Hartford, but each claim is worth more than US$50,000.
Early this year, PCA instituted a voluntary recall of all peanuts and peanut products processed at its Blakely, Georgia plant since Jan. 1, 2007.
Hartford has issued six policies to PCA covering both umbrella liability and general liability.
“Each of the policies contain terms, conditions, exclusions, and limitations including, but not limited to those pertaining to policy limits, coverage for ‘bodily injury,’ coverage for ‘property damage’ and coverage for claims arising out of the presence, suspected presence, or exposure to, among other things, bacteria,” the motion notes.
PCA and/or the manufacturers to which it sold peanut products and/or the people infected with the salmonella bacteria found at the Blakely plant assert that property contamination and bodily injury claims are covered under one or more of the policies, but Hartford disagrees.
“An actual controversy exists between Hartford and PCA as to whether one or more of the terms, conditions, exclusions and limitations limit, exclude or nullify coverage under the policies for one or more of the salmonella claims.”


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