With the food retail industry sales revenue valued at $5.32 trillion dollars, it’s no wonder why you want a piece of this thriving market. However, breaking into the food market is only half the battle. Even with the quality assurance process your food product line may go through, it only takes one negative occurrence with your product to cause unexpected difficulties. If a food poisoning claim can happen to Peter Pan Peanut Butter, a Conagra brand, it can most certainly happen to you too. The lawsuit Conagra faced illustrates the importance of product liability insurance and serves as a lesson for business owners everywhere to be prepared for the worst case scenario. Product liability insurance provides protection against bodily injury and property damage losses caused by a product you sold, manufactured or distributed. Types of product liability claims include defective warning or instructions, design, and manufacturing. Let’s walk you through Conagra’s situation.
Here’s What You Should KnowPeter Pan Peanut Butter was blamed for a nationwide salmonella outbreak, due to their peanut butter product. There were over 600 people in 47 states who experienced the negative outcomes of food poisoning. The company claims to have no knowledge of the peanut butter being contaminated with salmonella before it was shipped to stores all across the nation. On the other hand, plea agreement paperwork claims that their peanut butter tested positive twice for salmonella. Conagra entered a guilty plea and agreed to pay $8 million dollars in fines and $3.2 million in cash forfeitures.
Legal Fees Product Liability Insurance May CoverIf a consumer files a lawsuit against your company, you will be on the hook for legal fees to defend yourself. Regardless if you are found liable or not, defense costs can be astronomical. Lawyer fees alone can be $100-$400 per hour, depending on location, expertise, and experience in the field.
Additional litigation costs include:
- Court filing, processing fees, and evidence
- Late fees
- Hiring experts in the industry
- Travel expenses for yourself and legal team