Our Challenge 

A North American producer of fresh-mushrooms suffered a significant loss to a crop and damage to compost, following an act of negligence from an employee. 

Water contaminated with bacteria was unintentionally used to irrigate a valuable mushroom crop, preventing it from growing and rendering the compost unusable.

Miller presented the loss to insurers who denied the claim in full, sighting numerous exclusions under the policy, including that of ‘inherent vice’ or ‘nature’ of the subject matter insured. They argued that the mould was a natural characteristic that the mushrooms and compost were susceptible to and therefore not a covered risk under the policy. 

They also argued that the loss was solely caused by the process the mushroom crop was under and therefore excluded under the policy’s ‘process’ clause. 

Our Solution   

Drawing on our extensive stock through-put knowledge and experience, Miller’s claims team challenged insurers’ interpretation of the ‘inherent vice’ policy wording. We argued the loss was extraneously caused, given that the product was contaminated by irrigation water, and not damaged due to its inherent characteristics, nor due to the ordinary production process. 

Using our strong relationships with underwriters we were able to negotiate a compromise settlement, at a level which was "very much appreciated" by the mushroom producer, and by the US retail broker we worked with to place the policy.

This is a good example of how Miller’s claims team adapts quickly to overcome problems, using established insurer relationships built on trust to successfully negotiate the best outcome for our clients.