Sixth Circuit Holds Salmonella Outbreak Constitutes a Single Occurrence Under CGL Policies Despite Lot Endorsement
The U.S. Court of Appeals for the Sixth Circuit, applying Ohio law, affirmed summary judgment in favor of an insured food manufacturer and held that thousands of bodily injury claims arising from an alleged salmonella contamination event constituted a single “occurrence” under commercial general liability policies for purposes of determining the number of applicable retained limits. J.M. Smucker Co. v. Ace Am. Ins. Co., 2026 WL 1893804 (6th Cir. July 1, 2026). The court further held that a “lot endorsement” did not alter that result because the endorsement was reasonably susceptible to more than one interpretation.
The dispute arose after a company operating in the food manufacturing sector recalled peanut butter products produced at a Kentucky facility due to potential salmonella contamination. Thousands of consumers subsequently asserted claims alleging bodily injury and property damage. The insured sought coverage under consecutive CGL policies, each of which contained a $250,000 retained limit per occurrence. The insurer contended that each claimant’s exposure to a contaminated product constituted a separate occurrence that was aggregated into 225 occurrences by operation of a “lot endorsement” corresponding to production lots. Under the insurer’s interpretation, the insured would have been required to satisfy a separate retained limit for each lot before coverage obligations were triggered.
The policies defined an “occurrence” as “an accident, including continuous or repeated exposure to substantially the same general harmful conditions.” The lot endorsement provided that bodily injury or property damage arising from the “substantially same general harmful condition, cause, defect, error or suspected deficiency” and arising out of any one “lot” of the insured’s product “shall be considered as a single ‘occurrence.’” The insured argued that the accidental salmonella contamination event was the sole occurrence and that the endorsement merely aggregated claims within a lot rather than converting one contamination event into multiple occurrences if multiple lots were implicated. The insurer argued that each exposure was a separate occurrence and that the endorsement grouped those occurrences on a lot-by-lot basis.
Affirming the district court’s grant of summary judgment, the Sixth Circuit concluded that the alleged contamination event was the only relevant occurrence. Looking to the policy definition and Ohio’s “cause” test, the court reasoned that the operative accident from the insured’s perspective was the unintentional production of contaminated peanut butter, not each consumer’s subsequent consumption of the product. The court emphasized that Ohio determines the number of occurrences by reference to the cause of the injury rather than the number of resulting claims. Because the alleged injuries stemmed from a single, continuous source of contamination, the court determined that a single occurrence existed for retained-limit purposes.
The court also rejected the insurer’s reliance on the lot endorsement. The Sixth Circuit ruled that the endorsement did not expressly replace the existing definition of occurrence, and its reference to claims arising out of “any one ‘lot’” could be read either as a limitation on aggregation within a lot or as a mechanism for creating separate occurrences by lot. Given what the court viewed as competing reasonable interpretations, the court construed the provision in favor of the insured and affirmed the judgment declaring that the contamination event constituted a single occurrence.
