Poultry Company Sues Insurer After Failure to Cover Damages

A suit was filed last Friday in the Northern District of Georgia Gainesville Division by plaintiffs Foundation Food Group, Inc. and Prime-Pak Foods, Inc. (collectively, FFG) against defendant Selective Way Insurance Company (Selective). FFG is charging Selective, their insurer, with breach of contract after they have failed to cover an incident that occurred at one of the plaintiff’s plants.

The plaintiffs own and operate multiple poultry production facilities in Georgia. Because of the nature of the production, freezers are a necessary component of the facilities they operate. In late January of 2021, one of the freezers malfunctioned and caused a liquid nitrogen overflow into one of the rooms of the facility. The overflow prompted an evacuation of the entire plant. The fire department was called, but six employees died due to the overflow and several others were physically injured.

The plant four overflow was determined to be an accident. Despite this, it still had to be investigated by federal agencies, which prevented FFG from operating for several weeks. Overall, the overflow caused $2,000,000 in “property loss, business income loss, and extra expense.” FFG holds a commercial general property insurance policy with the defendant, which is intended to cover incidents like the overflow. Even though the plaintiff filed a timely claim with the defendant regarding the damages, they have yet to receive anything from Selective.

FFG asserts that Selective has “drowned FFG in requests for information and further explanations.” FFG has adhered to all of Selective’s requests for additional documentation and provided them with over 2,400 pages of Bates-labeled documents. By failing to provide any amount of money as relief to FFG, they have sued Selective on the basis that they breached duties that they assumed when they signed the insurance policy with the plaintiffs. The maintain that absent any relief, FFG “continues and will continue to suffer additional damages.”

Due to the perceived violations, the plaintiff is charging Selective with a breach of contract as the insurance company has “a contractual duty to pay FFG for business personal property losses, business income losses, and extra expenses that FFG incurred as a result of the incident.” They are seeking a favorable judgement on the matter, a declaration that the defendant must reimburse the plaintiff for the damages, a trial by jury, litigation fees, and any other relief deemed necessary by the court.

FFG is represented by Barnes & Thornburg.