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Insurance Company Loses Dispute With Moon Over Salmonella Tuna Recall

American insurance company, General Insurance Co., has failed to persuade a California Federal Judge that the salmonella outbreak and tuna recall faced by a seafood importer it insures, was caused by a single occurrence. They were denied conformation from the judge that this could limit the Moon Marine USA Corp’s coverage obligation to USD 1 million.

The judge ruled that the US public health regulators had not yet determined any one clear source of contamination at an overseas facility in India, from which distributer Moon Marine had imported contaminated yellowfin tuna to the U.S. The case filed by General Insurance was denied by U.S. District Judge, William Alsup.
Issuing a primary comprehensive general liability policy to Moon Marine in August 2011, General Insurance covered the company for USD 1 million single occurrence and USD 2 million aggregate limits. The insurance company attempted to sue Moon Marine in October 2012, arguing that the salmonella outbreak came under single occurrence.
In April 2012, a raw tuna product served as sushi was recalled from the market after it sickened at least 425 individuals across 28 US states and the District of Columbia. The tuna was produced by Moon Marine US Corporation, with the raw material imported from a supplier in a coastal fishing town in South India. The US Food and Drug Administration (FDA) could not identify any one source of contamination that caused the outbreak.
Judge Alsup said: “In order to decide what the occurrence is in this action, we need to trace the accused products back to the original source to determine the nature of the specific defect, recognizing that according to the FDA, multiple strains of salmonella might have been at work.”
General Insurance moved for summary judgment in September this year, asserting that the underlying claims came from a single source. This was argued by Moon Marine, which stipulated that the insurance company has to find a single cause that resulted in sickness of all 425 consumers.  General Insurance failed to persuade the court and the District Judge denied the motion.