Hunton Insurance Recovery Blog

The recent surge in the cost of eggs because of the avian influenza (bird flu) is impacting many consumers. Multiple grocery store chains have implemented limitations on the amount of eggs a customer can buy and restaurants have imposed surcharges on menu items with eggs. Consumers, however, are not the only ones feeling the economic impact of the ravage to poultry flocks, poultry farmers and producers are also feeling the financial strain. As we have explained in the past, insurance can help mitigate the risks to poultry farmers and producers associated with these kinds of events. Here, we explore how some types of coverages can help protect poultry farmers and producers who face unexpected events, such as those stemming from illness or contamination of a flock, that disrupt operations or cause a business loss.

A recent First Circuit ruling underscores that a well-negotiated insurance policy can cover claims for which state law has no remedy. In Starr Surplus Lines Ins. Co. v. Mountaire Farms Inc., Starr Surplus Lines Insurance Company insured AdvancePierre Foods Inc., a maker of ready-to-eat lunches and sandwiches. In 2015, a string of salmonella outbreaks were linked to chicken in AdvancePierre’s products, prompting AdvancePierre to recall more than 1.7 million pounds of chicken. The recall cost AdvancePierre over $10 million, which Starr covered under AdvancePierre’s product-contamination policy.