Insurance Carrier Seeks Reimbursement for Defense Costs in Diacetyl Litigation

Old Republic Insurance Co. has filed a lawsuit in a New York state court, seeking a declaration that it is entitled to reimbursement for the costs it has incurred defending a company that distributed diacetyl and has been sued with other companies for personal injuries allegedly sustained from exposure to the butter-flavored chemical. Old Republic Ins. Co. v. The Travelers Indemnity Co., No. 10103533 (N.Y. Sup. Ct., filed March 18, 2010). According to the complaint, some 21 active lawsuits are currently pending against Old Republic’s insured, Citrus & Allied Essence, Ltd. The carrier claims that it has successfully defended the company for three years at a cost of more than $1 million in cases where other carriers, including one that is now insolvent, share coverage and defense responsibilities.