Opinion ID: 2998583
Heading Depth: 4
Heading Rank: 3

Heading: “Impaired property”;

Text: if such product, work, or property is withdrawn or recalled from the market or from use by any person or organization because of a known or suspected defect, deficiency, inadequacy or dangerous condition in it. Exclusion n applies straightforwardly to the facts of this case. As we have noted, Sokol’s peanut butter paste qualifies as “your product” under the policy. The peanut butter was withdrawn from the market, replaced, and disposed of after Continental discovered it was rancid or “off taste,” an obvious “inadequacy” (if not worse). Even if the Insuring Agreement provided coverage here, Exclusion n applies to knock it out. D. Other Coverage Issues 1. Products-Completed Operations Hazard Sokol argues that its payment to Continental was covered under the policy’s Products-Completed Operations Hazard. This provision is one of the policy’s defined terms rather than a separate grant of coverage. It does not operate to 12 No. 04-3624 provide coverage that is not otherwise extended by the policy. By virtue of references to the Products-Completed Operations Hazard definition, the policy’s underlying coverage for “bodily injury” and “property damage” is extended to include occurrences that take place off the premises of the insured. Although Sokol’s peanut butter paste may have gone bad after it left Sokol’s premises, the absence of “property damage” within the meaning of the policy precludes coverage here. 2. Product Recall Expense Endorsement Sokol contends that its payment is covered under the Product Recall Expense Endorsement, a separate rider that operates to modify Exclusion n (Recall of Products, Work or Impaired Property). The Endorsement extends coverage to “Covered Recalls,” which are defined as “recall[s] made necessary because the insured or a government body has determined that a known or suspected defect, deficiency, inadequacy or dangerous condition in ‘your product’ has resulted in or will result in ‘bodily injury’ or ‘property damage.’ ” By its terms, this endorsement is limited to recalls initiated by “the insured or a government body.” Here, Continental—not Sokol or the government—initiated the removal and replacement of the peanut butter paste. Accordingly, the Product Recall Expense Endorsement does not supply coverage. For the foregoing reasons, the decision of the district court is AFFIRMED. No. 04-3624 13 A true Copy: Teste: ________________________________ Clerk of the United States Court of Appeals for the Seventh Circuit USCA-02-C-0072—11-29-05