The case of Cargill Inc. v. ACE Property & Casualty Insurance Co., Case No. 250703456, is of interest for certain coverage disputes in Canada. It was filed in the Court of Common Pleas in Philadelphia on July 31, 2025. The claim involves a coverage dispute over an umbrella liability insurance policy that Cargill Inc. (“Cargill”) purchased from ACE Property & Casualty Insurance Company (“ACE”). In addition to the ACE policy, Cargill maintained a commercial umbrella policy from National Union Fire Insurance Company of Pittsburgh (“National Union”). Cargill is taking the position that ACE improperly refused coverage under an excess liability policy to the National Union policy.

On May 5, 2021, Cargill became aware of contamination within products it manufactured, leading to its customers recalling and/or destroying their derivative products. Cargill provided notice of the contamination to its insurers on June 18, 2021. Cargill’s other insurers provided coverage under their policies for the loss; however, ACE did not. Importantly, ACE issued only one reservation of rights letter, dated July 7, 2023, stating that it lacked sufficient details to determine coverage.

In this reservation of rights letter, ACE alleged that Cargill was either aware of the contamination as early as 2018 or that its customers may have received contaminated products in 2018. ACE also reserved its opinion on whether portions of Cargill’s claim were properly classified as property damage within the definitions of the policy. Notably, at the time this case was filed, four years after the loss, ACE still had not taken a position on coverage, nor issued an updated reservation of rights letter or made any payments under the policy.

Cargill’s claim is in part against ACE on the basis that it knew of the position taken by National Union in accepting coverage, but in over four years, it has not paid anything in respect of the claim. Cargill also takes issue with the fact that ACE never addressed through its reservation of rights letter that it disputed National Union’s coverage of the loss. The fact that National Union categorized the contamination as a single occurrence and paid Cargill pursuant to the policies leads Cargill to believe that ACE’s actions were unjustified. If Cargill is successful in this claim, it is a warning to excess insurers as to the dangers of taking a contrary position to the primary coverage and not specifically stating the basis of its coverage position to its insured. We will continue to follow this case and report on any future rulings.