(Article from Insurance Law Alert, July/August 2026)
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Holding
In a decision applying Ohio law, the Sixth Circuit affirmed summary judgment for food manufacturer J.M. Smucker Company (“Smucker”), on the ground that thousands of claims arising from an alleged salmonella outbreak constituted a single “occurrence” under Smucker’s commercial general liability policies. The court further held that the policies’ Lot Endorsement was ambiguous and therefore did not require the claims to be treated as separate occurrences based on the production lots from which the allegedly contaminated products originated. The J.M. Smucker Co. v. ACE Am. Ins. Co., 179 F.4th 1038 (6th Cir. 2026).
Background
This insurance dispute arose from Smucker’s 2022 recall of peanut butter products that were potentially contaminated with salmonella at its production facility. The recall was followed by thousands of claims against Smucker. ACE denied coverage because Smucker had not satisfied a separate retained limit for each occurrence. Because the policies contained a retained limit of $250,000 per “occurrence,” ACE maintained that Smucker was responsible for satisfying the retained limit for each of the 225 occurrences before ACE’s coverage obligations attached.
The district court granted summary judgment to Smucker, reasoning that the salmonella contamination constituted a single occurrence and that the Lot Endorsement was ambiguous.
Decision
The Sixth Circuit affirmed. The court first examined the policies’ definition of “occurrence” as “an accident, including continuous or repeated exposure to substantially the same general harmful conditions.” Because the policies did not define “accident,” the court applied Ohio law, under which the relevant inquiry focuses on the insured’s perspective and “what the insured did unintentionally that exposed it to liability.” Applying that standard, the court concluded that the alleged salmonella outbreak—and not each claimant’s consumption of peanut butter—was the “only identifiable” accident that gave rise to the actions against Smucker.
The court explained that “the number of occurrences is determined by reference to the cause or causes of the damage or injury, rather than by the number of individual claims.” The Sixth Circuit therefore rejected ACE’s argument that each claimant’s exposure constituted a separate occurrence, concluding that such an approach was inconsistent with Ohio’s cause-based analysis.
The court separately addressed the Lot Endorsement and concluded that it was ambiguous. First, the court noted that, unlike other endorsements in the policies, the Lot Endorsement “does not specify that it is replacing the definition of ‘occurrence.’” Second, the court held that the phrase “[a]rises out of any one ‘lot’” was ambiguous because it could be interpreted either as (i) a limitation, applying where multiple injuries resulting from the same condition within a single lot constitute one occurrence; or as (ii) an aggregation provision, grouping injuries by production lot. Because Ohio law requires ambiguities to be construed against the insurer, the court concluded that the Lot Endorsement did not alter the result dictated by the policies’ occurrence definition.
The court also rejected ACE’s argument that Smucker’s interpretation rendered the Lot Endorsement superfluous. The court accepted as plausible Smucker’s alternative theory that the Lot Endorsement served a “timing function” by determining the policy year in which an occurrence involving a single lot is deemed to occur. Under that interpretation, when injuries arising from a single lot span multiple policy periods, Smucker would be required to satisfy the retained limit for only one policy year rather than multiple policy years.
Comments
The practical significance of a single-occurrence finding depends on the terms of the policy and the interests of the parties in the particular coverage dispute. A finding of one occurrence is not necessarily favorable to a policyholder in every case. Where a policy contains substantial per-occurrence retentions or deductibles, a policyholder may prefer a single occurrence to avoid multiple retentions. By contrast, where a policy provides per-occurrence limits, a policyholder may seek to establish multiple occurrences to maximize available coverage.
The decision highlights the fact-specific nature of occurrence disputes and the importance of clear policy language addressing how claims arising from a common cause, lot, batch, or other related event should be treated. Because the Sixth Circuit’s analysis was grounded in Ohio law, the decision’s broader impact will depend in part on how other jurisdictions approach similar occurrence questions.