Rhode Island based insurance company Factory Mutual sued construction company Henning Companies LLC for US$25 million over an egg farm fire that occurred in February 2020.
One house, portions of another and connecting structures were destroyed, along with over 40,000 layers. No people were injured.
Daniel Berglund, Factory Mutual’s attorney, claims that Waldbaum sustained US$24,908,633 worth of damage from the fire. During construction, Factory Mutual paid $22,408,633 of the total. The lawsuit seeks repayment of the full amount.
According to Berglund, the fire was started by a manure blower fan assembly that ignited chicken feed dust, and other dust, in the northeast portion of the upper floor of the house.
In 2017, Berglund said M.G. Waldbaum Company, a subsidiary of Michael Foods, used Henning as a contractor for the construction of 12-layer houses and supporting facilities for the project in rural Bloomfield, Nebraska. M.G. Waldbaum Company owned the houses and birds.
Factory Mutual believes Henning Companies breached its agreement with Waldbaum concerning the design, construction, selection, use and installation of the manure blower fan.
"Defendant Henning and subcontractors also created conditions that allowed the fire to rapidly spread," stated Berglund in the lawsuit. Henning has not responded to the lawsuit as of December 27, 2022.
Obtaining insurance on poultry houses can be tricky
The U.S. the egg industry has suffered many large fires that have caused severe damage and loss of birds. However, obtaining insurance to cover these incidents can be difficult due to certain risk factors.
The number of poultry house fires in the last five years has caused insurance to increase significantly in costs for producers. Additionally, the re-build cost for barns has increased.
Currently, multiple insurers share the risk to provide the amount of coverage a producer needs, especially for larger farms. However, this has led to insurers reducing the amount of coverage they are willing to offer to any one egg producer. This forces companies to internationally search for a combination of insurance coverages that will meet their needs.
