Cargill sues insurer over failure to pay $45 million in crime loss protection
Agricultural giant Cargill has filed a lawsuit against its insurer National Union Fire Insurance Company for allegedly failing to pay out nearly $ 45 million in losses.
The losses were the result of an elaborate fraud scheme involving two Cargill employees who worked with one of its suppliers, Women’s Distribution Services (WDS), to overcharge the company, Agweek said.
Cargill, headquartered in Minnesota, discovered the fraud system in 2016 when the company claimed it was covered by National Union Fire Insurance for crime damage insurance for up to $ 25 million.
The company, which serves food, agricultural, financial, and industrial products to customers in more than 70 countries, calculated the total loss to the program since the program began in 2009 at $ 44.7 million.
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In its lawsuit, Cargill alleged that the insurance company was in breach of contract and that it is demanding the $ 25 million limit of the criminal investigation policy in addition to other damages.
One of the Cargill employees and two WDS founders involved in the program pleaded guilty to wire fraud in 2019, while the other employee was charged with wire fraud earlier this year.