Fresca Foods sues insurer in Marshall Fire dispute

LOUISVILLE — A Marshall Fire-forced work stoppage at Fresca Foods Inc., a Louisville-based and privately held natural-foods manufacturer, allegedly resulted in lost business and now a legal dispute with the company’s insurer.

Fresca Holding Co. LLC sued Citizens Insurance Co. of America, a subsidiary of the Hanover Insurance Group, this week in Boulder County District Court, alleging breach of contract and accusing the insurer of improperly withholding payouts for claims made while the company’s manufacturing facilities were idle due to lack of potable water.

Fresca’s lawsuit claims that during firefighters’ battle against the December 2021 blaze, non-potable water was introduced to Louisville’s water supply, and because the food manufacturer’s operation relies on the availability of clean water, operations ceased until lab tests in January proved the water safe.

The company filed a claim with Citizens, and in late January the insurer wrote back “that because the [municipal water] pumping station did not sustain physical damage because of the Marshall Fire, there was no coverage” for resulting lost productivity under Fresca’s policy, the complaint said.

Regardless of whether the pump stations weathered the blaze undamaged, Citizens “failed to consider whether the presence of non-potable water in the city of Louisville’s water supply rendered the Fresca Facilities unsafe even without tangible injury or physical alteration” to the stations, the lawsuit argues. 

“Fresca purchased the policy from Hanover/Citizens to protect itself from, among other things, property damage and loss of income in the event Fresca’s business operations are suspended because Fresca is deprived of the use of its facilities for reasons outside of its control,” Fresca attorney said in the complaint.

The company claims that it had also purchased a policy-broadening insurance product that “provides coverage for loss or damage related to an interruption of utility services.”

Fresca representatives declined to comment, and Citizens/Hanover representatives did not respond to requests for comment Thursday. 

The lawsuit demands unspecified damages.

The case is Fresca Holding Company LLC versus Citizens Insurance Company of America, case number 2022CV30673, filed Oct. 3, 2022 in Boulder County District Court.

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