The maker of Chipwich ice cream sandwiches is suing its insurance broker alleging the agency was negligent in failing to properly secure product recall insurance that would have helped it deal with what it claims is a $4.5 million loss stemming from a product recall.
Frozen food manufacturer Crave Better Foods of Greenwich, Connecticut, blames Carlson & Carlson, Inc. (C&C), an insurance broker in Riverside, Connecticut, for leaving it unprotected for a product recall of Chipwich products.
As a result of this recall, CBF claims it incurred more than $4.5 million in costs including destroyed inventory; costs of goods sold; excess freight charges; customer deductions; and lost sales. This does not include reputational harm caused to the Chipwich brand by the recall, according to the complaint filed in Connecticut Superior Court.
CBF accuses the insurance agency of professional negligence, breach of contract, and negligent misrepresentation over its alleged failure to recommend and procure sufficient insurance coverage, leaving CBF to bear the expensive consequences of the recall. The manufacturer argues that the agency had a duty to recommend to CBF and procure insurance against foreseeable risks of manufacturing food products that are distributed nationwide.
C&C last week moved to have the breach of contract claim stricken from the case on the grounds that it fails to state a legally cognizable claim. Although the breach of contract purports to assert a cause of action for breach of contract against the insurance agency, C&C maintains that count should be stricken as it fails to allege that C&C breached an agreement “for a specific result,” which C&C told the court is required for a legally sufficient breach of contract claim against an insurance agent or broker under Connecticut law.
CBF acquired the Chipwich trademark in 2017 years after the product was discontinued and began the process of re-launching Chipwiches into stores.
