Taco Bell Franchisees Prevail in Insurance Suit

A New Jersey Superior Court judge has ruled that Lloyds of London could not deny foodborne illness insurance coverage to Taco Bell franchisees. The insurance company stopped offering foodborne illness coverage after an E. coli outbreak harmed 70 people in 2006. Some 70 Taco Bell owner-operators of some 1,300 locations filed a lawsuit.

In the ruling June 12, the court said the insurance company never explained the exclusion or the fact that the policyholders’ insurance coverage was reduced by the change in policy. The judge also said the language describing the sublimit was rife with undefined terms. The judge said, for example, that the lettuce in question was not a “product” for which the insurance policy would not apply, as argued by Lloyds, but an “ingredient” that would be covered. - NRN