Tenth Circuit Limits E. Coli Insurance Coverage

The Tenth Circuit Court of Appeals has determined that a 2008 E. coli outbreak involving food prepared and served at a restaurant and a catered event constituted a single occurrence under the relevant insurance policies, thus reversing a magistrate judge’s conclusion that there were two occurrences and application of the policies’ aggregate limits rather than their “per occurrence” limits. Republic Underwriters Ins. Co. v. Moore, No. 11-5075 (10th Cir., decided July 20, 2012).

The outbreak apparently infected 341 individuals, and one person died. When
it appeared that the policy limits would be exceeded, the insurers brought
this interpleader action, requesting that the court declare that the “per
occurrence” limits applied, providing $3 million in coverage. Agreeing with
the insurance companies, the Tenth Circuit stated, “[h]ere, all the injuries were
proximately caused by the restaurant’s ongoing preparation of contaminated
food. Hence, there was but one occurrence. It does not matter that the food
was served with other food items prepared at another location because the
contamination originated at the restaurant. Nor does it matter that the precise
underlying cause of the contamination is unknown because the fact remains
that the contamination originated at the restaurant.”