Updates to our Terms of Use

We are updating our Terms of Use. Please carefully review the updated Terms before proceeding to our website.

Thursday, March 28, 2024 | Back issues
Courthouse News Service Courthouse News Service

No Coverage for Dead Chickens, Court Rules

(CN) - An insurance company doesn't have to cover the claims brought by a poultry processing plant after a power outage killed chickens, the 8th Circuit ruled.

George's Inc. claimed its insurance company, Allianz Global Risks U.S. Insurance Co., failed to cover business expenses and personal property losses under its policy after a power outage halted production and killed a number of chickens that were stored in a holding shed for processing.

After ice storms in early 2007 caused power outages at George's plant in Cassville, Mo., the company filed a claim for $309,676 in lost income and extra expenses. When Allianz Global denied portions of the claim, George's filed suit, claiming that $155,000 in labor and overhead costs and $30,000 for the lost chickens was recoverable under the extra expense portion of the policy.

The St. Louis court found that the extra expense provision is intended to cover unforeseen expenditures, such as overtime pay or other expenses.

"[T]he policy unambiguously excludes coverage for both claimed losses," Judge Roger Wollman wrote.

"At bottom, George's claim is one for lost production, not increased expenses," Wollman wrote.

The court added that the company's personal property coverage excludes animals, though George's argued that the chickens be treated as processing stock."The policy makes no distinction based on the animals' proximity to the processing facility," the court ruled.

Categories / Uncategorized

Subscribe to Closing Arguments

Sign up for new weekly newsletter Closing Arguments to get the latest about ongoing trials, major litigation and hot cases and rulings in courthouses around the U.S. and the world.

Loading...