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Insurer’s Bid to Cut Losses in $10M Salmonella Recall Axed

Aug. 3, 2018, 6:05 PM

Starr Surplus Lines Insurance Co. can’t recoup a $10 million insurance payout from a food supplier it alleged was responsible for the recall of 1.7 million pounds of salmonella-tainted chicken, a federal court in Maine ruled Aug. 2.

Salmonella bacteria naturally occurs in chicken and therefore isn’t a product defect upon which Starr can base its tort claims against Mountaire Farms Inc., the U.S. District Court for the District of Maine said.

The ruling reflects the second wave of litigation that typically follows outbreaks: First come the personal injury cases, then the insurance suits.

Starr paid out on the policy...

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