lettuce that sickened more than 70 Taco Bell patrons in four states in 2006
is still an issue on the table for the restaurants. Franchise owners
finally heard a decision in a lawsuit they filed against their insurance
company for damages caused by the outbreak.
The judge ruled in the franchisees’ favor, meaning that their insurance
company could not deny them coverage for damages from lost revenue due to
The case, tried in a New Jersey superior court, went in the franchisees’
favor because the insurance company changed the policy without notifying
the franchise owners, and without wording the new policy clearly, according
to media reports.
The franchisees had originally signed a policy with Lloyd’s of London to
have foodborne illness coverage. In the early 2000s, the insurance company
discontinued that policy, but the franchisees bought a new policy from the
same underwriter, understanding their foodborne illness coverage was the
The policy underwriters had changed the policy to include a zero dollar
sublimit, but had not clearly conveyed that in the policy, nor explained it
to the franchisees, the judge said, according to media reports.
Lloyd’s tried to argue that the losses were the supplier’s fault.
The judge also ruled that the lettuce should be considered an ingredient,
which would be covered by the policy, instead of a product, which would not
be covered, according to the ruling.
The franchise owners have not recovered any damages yet. The policy limit
was originally set at $30 million, according to media reports.
Green onions were first suspected in the outbreak, but the spotlight was
later turned to bagged lettuce tainted before it reached the restaurants.
More than 70 people were sickened, 53 of them requiring hospitalization, in
New Jersey, New York, Pennsylvania and Delaware.