New FOOD Insurance Program from CNA Helps Processors Quickly Recall Products.

CHICAGO--(BUSINESS WIRE)--Oct. 1, 1998--CNA Commercial Insurance, a business unit of CNA (NYSE:CNA), has introduced a new program designed to help food processors respond to problems associated with product recalls.

Food contamination and spoilage cause an estimated 9,000 deaths and 33 million illnesses each year. A recent call for Congressional action on food safety cited medical costs and productivity losses from food-borne illness ranging from $6 billion to $34 billion annually. Early product recalls can limit or prevent the spread of food-borne illness, but there are many insurance policies for food processors that won't cover product recall expenses unless a government mandate is issued for the recall.

The FOOD Program now available from CNA Commercial Insurance contains much broader triggers for coverage of product recalls.

"We saw the need for food processors to recall products at the first sign of trouble," said Deborah Rudman, vice president of CNA Commercial Insurance. "Our new FOOD Program makes it possible for producers to take preventive action by getting products off the shelves quickly if there's any question of food safety." The FOOD Program's product recall expense coverage provides up to $1 million for expenses caused by the removal of products that could cause bodily injury or property damage, and even covers any communication costs to make Internet announcements.

"We consider our product recall coverage to be among the broadest in the industry," said Rudman. "We have seen insurance policies in the marketplace that require a government recall order to trigger coverage. Usually, that happens only after illness or even death has occurred and been linked to the product. The broader triggers in the FOOD Program allow food processors to move quickly and responsibly in situations where saving time can avert tragedy."

FOOD Program Designed Specifically for Food Processors

The FOOD Program is created specifically for food processors -- companies involved in processing and packaging of products ranging from butter, ice cream and cheese to candy, coffee and cereal. The FOOD Program offers comprehensive coverage for a variety of situations including consequential loss/spoilage coverage and business loss of income. The program also contains coverage for commercial property, general liability, commercial auto and workers' compensation.

"We looked at many aspects of the food processing industry when we designed the FOOD Program," said Rudman. "Increased competition has squeezed profit margins, making coverage of expenses for product recall even more important to this industry. Loss of electrical service can be devastating to food processors because many rely heavily on refrigeration, so the FOOD program provides specialized coverage for spoilage related to mechanical breakdowns. Our coverage for business loss of income addresses the concerns of many food processors, such as candy manufacturers, that have highly seasonal income streams.

"Broader coverage for product recalls -- combined with a range of loss-control services and standard-setting claims handling -- gives the FOOD program from CNA Commercial Insurance the type of customized protection that food processors require today," Rudman said.

CNA Offers Comprehensive Line of Insurance Programs for Food Industry

The FOOD Program rounds out a comprehensive line of insurance products designed for the food industry. Other food-related insurance programs available from CNA Commercial Insurance include programs affiliated with the American Association of Meat Processors, the American Vintners Association, the Craft-Brewing Program (sponsored by the Institute for Brewing Studies) and the Produce Industry Class Program (sponsored by the United Fresh Fruit & Vegetable Association).

CNA is one of the world's premier insurance organizations. With 1997 revenues of $17 billion, CNA ranks among the top 10 U.S. insurance groups.

Headquartered in Chicago, CNA is a leading multiline insurer, serving individuals and businesses with a broad range of insurance products and insurance-related services. CNA products and services are marketed through multiple distribution channels, including independent agents, brokers, general agents and direct sales.

Since 1897, CNA has built on a foundation of financial strength, stability and commitment to customers and business partners.

CNA is the registered service mark and trade name of CNA Financial Corporation.