I don’t think I’m going to make too big a deal of Cottonseed v. Coulthard, 2006 WL 2165661 (Wis.App. August 3, 2006), but I was kind of annoyed the court fell back on the tired old cliche that a breach of contract can’t constitute an "occurrence" in an insurance policy because an occurrence has to be an accident, while a breach of contract is an intentional act.
What happened in the case is this: a cottonseed seller sold some product to a dairy farmer that had some mold, yeast and aflotoxin, and which made the cows’ milk yield to decrease. The farmer refused to pay, the seller sued for the unpaid balance, the farmer filed a counterclaim for breach of contract. The seller filed a third-party complaint against an intermediate seller for indemnity as well as the intermediate seller’s insurer. The court got the right result, but without the right analysis. The reason no coverage exists is not because a breach of contract happened but rather that something is an occurrence only if it causes bodily injury or damage to tangible property. The farmer’s counterclaim for bad seed does not appear to have alleged that any cows died or that any milk was contaminated, and so there was no occurrence.