Verdicts: Itella Foods v. Northern Insurance Co.

Company Awarded $12 Million Against Bad Faith Insurer

Itella Foods manufactured seafood salad. In this case, a batch of listeria-contaminated onions caused 100,000 pounds of its seafood to be adulterated. The company recalled the product because it could be dangerous to people's health and presented a claim to its insurance company.

The insurer first tried to say that only the expenses of the recall were insured, and not the loss of the product itself. When the company contested this, the insurer then denied the product claim on the basis of a "pollution exclusion."

Biren Law Group won a summary judgment that the product loss was covered and then settled the insurance claim for approximately $500,000. After trial, the jury found that the insurer had acted in bad faith and awarded punitive damages.

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