June 2016

Ingredient Manufacturers and Their Product Recall Risk

[highlight type=”light”]The following is a theoretical scenario.[/highlight]

Ingredient Manufacturers and Their Product Recall RiskUSA Sugar is a processor of sugar. They bring refined sugar into their production plant, where it is transformed into a liquid form and sent to USA Sugar’s customers, who use the liquefied sugar in various food manufacturing applications.

On May 15, 2015 the FDA contacts USA Sugar and notifies them that salmonella was found in beverage products manufactured by two separate companies. Both strains of salmonella have been traced back to USA Sugar’s liquid sugar product. After a series of tests, it is determined that the liquid sugar was in fact the source of the salmonella. It was also determined that the salmonella contamination occurred in the insured’s facility between March 3 and March 17, which was a period of roughly two weeks.  On March 17, all production lines were broken down and a thorough cleaning was performed. The products manufactured after the March 17 cleaning appear to be free of salmonella.

As a result of the findings, USA Sugar decides to perform a voluntary recall of all products manufactured between March 3 and March 17. In addition to USA Sugar’s recall, all products containing USA Sugar’s contaminated liquid sugar will need to be recalled. The FDA classifies all related recalls as Class I, meaning consumption could result in serious health problems or death.Read More »Ingredient Manufacturers and Their Product Recall Risk

Potential Exposures for Construction Owners ​​​​​​​​​​​​​

Potential Exposures for Construction OwnersAs always with construction projects, it is important that owners of new developments understand insurance coverage to ensure that there is adequate insurance to address any potential risks during and after the construction of the project. While most owners maintain commercial general liability policies or rely on project-specific policies, these policies may not fully protect the owner against any and all risks that they may face during and after construction. This article addresses two unique areas in which owners should take special note to ensure that they are covered for these particular risks: third party action over claims and products-completed operations coverage.

 

Third Party Action Over Claims

Owner contracts with Roofer to assist in the construction of the roof of a commercial building. During construction, Roofer’s employee falls and injures himself on the project site and collects workers’ compensation benefits under Roofer’s workers’ compensation policy. Typically, Owner would not consider any risks with respect to this injury as Owner required Roofer, in the subcontract, to maintain workers’ compensation insurance. However, despite receiving workers’ compensation benefits, Roofer’s employee files an action against Owner alleging negligence for failing to properly maintain a safe work site.The action filed by Roofer’s employee is considered a third party action over claim. The employee is unable to sue Roofer because workers’ compensation is the employee’s exclusive remedy against his or her employer. Thus, the injured employee brings an action against Owner alleging that Owner’s negligence in failing to maintain the project site contributed to the employee’s injuries.
Read More »Potential Exposures for Construction Owners ​​​​​​​​​​​​​