BOP Coverage for Liability Claim Based on Food Illness

July 13, 2010

My question concerns the ISO Businessowners form, BP 00 03 01 06, with attached endorsements for bacteria—BP 06 01 01 07, Exclusion of Loss due to Virus or Bacteria, and  BP 05 77 01 06, Fungi or Bacteria Exclusion (Liability).

A customer suffered from food illness due to the ingestion of a dairy raw milk product; the claimant allegedly suffered serious bodily illness and disease caused by bacteria (campylobacter pathogen) contained in the milk. Our insured is a distributor of the product.

Form BP 06 01 states in paragraph B, “We will not pay for loss or damage caused by or resulting from any virus, bacterium or other micro-organism that induces or is capable of inducing distress, illness or disease.”

Form BP 05 77 disallows coverage for liability due to bacteria but allows coverage for food consumed.

Does the wording in paragraph B of BP 06 01 negate the exception allowing coverage for consumed food in BP 05 77?

Pennsylvania Subscriber

BP 06 01 applies to the property coverage on the Businessowners form, and BP 05 77 applies to the liability coverage. So, BP 05 77 adds an exclusion for fungi or bacteria to the liability section of the BOP form, with the exception for “any 'fungi' or bacteria that are, are on, or are contained in, a good or product intended for bodily consumption.” That exception, though, does not apply to the property section of the form. But, the provisions in BP 06 01 do not affect the exception on BP 05 77 in regards to liability coverage.