A federal court in New York recently found that litigation concerning damages related to a third party’s product recall required a defense under a commercial general liability policy. Thruway Produce, Inc. v. Mass. Bay Ins. Co., 2015 U.S. Dist. LEXIS 94846 (S.D.N.Y. July 20, 2015). Thruway Produce sold apples to Milnot Holding Company for use in baby food. The parties’ contract required the apples to be free of certain rodenticides (used to kill rats and mice). After discovering that certain apples were contaminated with rodenticide, Milnot was forced to recall its baby food. Milnot then sued Thruway, alleging that Thruway breached the supply contract and breached express and implied warranties. The baby-food maker sought roughly $1.5 million in damages for “among other items of loss, produce recall and disposal.”
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