Companies Need to Review Their Insurance as FDA Announces First Rules Under FSMA

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On January 4, 2013, the Food and Drug Administration (“FDA”) issued the first two rules that will put into effect the Food Safety Modernization Act (“FSMA”), a law passed by Congress in 2011 that is designed to prevent food-borne illness on a nationwide basis.  The FDA has said that both FSMA and its rules are intended to constitute a proactive rather than a reactive approach to food-borne illness.  Both rules will be subject to a 120-day public comment period before they can take effect.

The first proposed rule, the Preventive Controls for Human Food Rule, would require food companies – whether they manufacture, process, pack or store food – to develop formal plans to prevent their products from causing food-borne illness through contamination.

The second proposed rule, the Produce Safety Rule, would require farms that grow, harvest, pack or hold fruits and vegetables to follow science- and risk-based standards for the production and harvesting of produce on farms.  These standards are aimed at preventing contamination in the growing, harvesting, packing, and holding processes.

Although these two new proposed rules are the first ones that the FDA has proposed to implement FSMA, they likely are not the last.  FSMA, which runs for 1,200 pages, covers a wide range of food-related issues.  It provides specific controls and hazards that companies must address.  Although the FDA had not met the deadlines for rolling out rules that FSMA set out, FSMA has many provisions that require FDA rules or regulations for implementation.  In a press release also issued on January 4, 2013, the FDA stated that it soon would propose additional rules, including rules regarding the overseas growth and processing of food products.

Together, FSMA and the two new proposed rules (as well as future rules) can have a significant effect on food companies’ liability risk should a food-borne contamination or recall occur.  Companies at all levels of the food supply chain thus should be aware that FSMA and related rules could change the effectiveness of their current risk management and mitigation strategies.  Because food companies still have time before these two proposed rules will become effective, and before the FDA proposes other rules, now is the time that companies need to review their risk mitigation strategies, including by reviewing their insurance and indemnification agreements, to ensure that they protect themselves in this evolving legal environment.

Topics:  FDA, Food Safety, FSMA, Manufacturers

Published In: Administrative Agency Updates, General Business Updates, Insurance Updates, Products Liability Updates

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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