Insurer Agrees to Pay $11 Million to Settle Coverage Dispute in Salmonella Outbreak

A company that insured Basic Food Flavors Inc. has asked a court to approve its settlement in a coverage dispute concerning a 2010 Salmonella outbreak involving hydrolyzed vegetable protein, a flavorings ingredient used in processed foods. Employers Fire Ins. Co. v. Basic Food Flavors Inc., 10-1109 (D. Nev., motion to approve settlement filed March 21, 2012). The ensuing recall apparently affected more than 100 of Basic Food’s customers, in addition to downstream suppliers, distributors and retailers. Under the agreement, the insurance company agreed to pay its coverage limits of $11 million. According to a news source, a neutral administrator has approved more than $34 million in claims against Basic Food. See Law 360, March 22, 2012.