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Peanut business has $12 million in liability coverage

An official with the beleaguered Peanut Corp. of American disclosed today that the company has product liability coverage from two policies totaling $12 million.

The information came during a creditors meeting in bankruptcy court in Lynchburg.  As reported by The News & Advance, federal officials have linked the company to 650 salmonella cases.  Scores of lawsuits already have been filed, and personal injury attorneys were among those at this morning’s section 341 meeting.  At least one of the peanut company’s insurers has asked a federal court to limit its coverage for the tainted food actions.

Company president Stewart Parnell of Lynchburg declined comment both in and out of the meeting.


The Atlanta Journal-Constitution is reporting that there may be as much as $24 million in coverage for products liability claims against the peanut company, but few claimants would qualify for the first $12 million.

Houston personal injury lawyer Ron Simon told the paper the company’s annual liability policy was renewed as of Oct. 1.  He explained that the handful of people who got sick prior to Oct. 1, if they can prove their claims, potentially could share that policy’s $12 million limit.   The vast majority of others with claims from the allegedly tainted peanut products would have to compete for the current policy’s $12 million in coverage.

The paper reports another lawyer with multiple claimants is working to negotiate deals with the still-solvent companies that sold food products made with peanuts from the Lynchburg-based Peanut Corp. of America.

By Peter Vieth

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