- Food & Agribusiness Industry Update
- Heat Illness Prevention
- Client Beware: New Records Being Set for Criminal Fines for Food Safety Violations
- On-Demand Webinars
Field to Fork: Summer 2020
Regulators have started to use a new tool in their efforts to regulate food safety throughout the food industry. In addition to the use of (or the threatened use of) criminal prosecution of executives and QA managers, and the resulting jail sentences pursuant to the Park Doctrine, regulators have recently begun seeking multimillion-dollar criminal fines from food safety violators. These efforts have been successful and, in many cases, record-breaking.
In early 2017, a criminal fine of more than $11 million dollars was imposed for a food safety violation when an American packaged food company reached a plea deal resolving a decade-long criminal investigation into a salmonella contamination of some of its products that sickened approximately 700 people. The deal, which included entering a guilty plea by the company to a misdemeanor of shipping adulterated food, involved the largest criminal fine imposed for a food safety violation in history to that point.
This record did not stand for long. During the COVID-19 pandemic, the Food & Drug Administration (FDA) and Department of Justice (DOJ) were hard at work expanding this strategy.
In early May 2020, a large ice cream manufacturer agreed to a pay a criminal fine of $19.5 million, which included a settlement of false claims act violations in connection with an ice cream contamination linked to a 2015 listeria outbreak killing at least three people.
A few weeks later, the DOJ entered into a deferred prosecution agreement with a fast food chain in exchange for payment of a $25 million penalty (another new record) in connection with several different foodborne illness outbreaks (including norovirus) across the country at a number of its restaurants that sickened over 1,000 customers. As part of the deal, the fast food chain agreed to implement new and improved food safety protocols.
These examples demonstrate that regulators are vigilant in their efforts to ensure food safety and compliance with the regulations, and should serve as important reminders to those in the food industry to prioritize food safety efforts.
Understandably, these are the sorts of records you don’t want to hold. We encourage our clients to recognize that these sort of risks — criminal fines associated with food safety violations — need to be taken into account in preparing for food safety crises and should be part of a food company’s overall risk mitigation strategy as it relates to food safety/product contamination/product recall exposure.
For more information on product recall/contamination coverage or to review your exposures, reach out to Steve Kluting at (616) 224-1301 or a member of your Gallagher team.
Heat Illness Prevention
Summer months and progressing weather patterns means that it will soon get hotter and more humid, which presents an increased risk for workers that are exposed to harsh and unforgiving environments.
Heat-related illnesses and injuries are a significant risk in the food and agribusiness industry during the summer. Join Chase Chavers and Cadrien Livingston from our National Risk Control team to learn more about:
- How heat transfer works in the human body
- How humidity, hydration and habits affect the way the body reacts to heat
- Best practices for preventing heat stress
Gallagher provides insurance, risk management and consultation services for our clients in response to both known and unknown risk exposures. When providing analysis and recommendations regarding potential insurance coverage, potential claims and/ or operational strategy in response to national emergencies (including health crises), we do so from an insurance/risk management perspective, and offer broad information about risk mitigation, loss control strategy and potential claim exposures. We have prepared this commentary and other news alerts for general informational purposes only and the material is not intended to be, nor should it be interpreted as, legal or client-specific risk management advice. General insurance descriptions contained herein do not include complete insurance policy definitions, terms and/or conditions, and should not be relied on for coverage interpretation.
Insurance brokerage and related services to be provided by Arthur J. Gallagher Risk Management Services, Inc. (License No. 0D69293) and/or its affiliate Arthur J. Gallagher & Co. Insurance Brokers of California, Inc. (License No. 0726293).