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- Title
LOSSES FROM ERRONEOUSLY UNDERPRICED PRODUCTS DUE TO MISLABELING NOT COVERED AS PROPERTY LOSS CLAIM UNDER COMMERCIAL LIABILITY POLICY.
- Authors
Stempel, Jeff
- Abstract
The article discusses the case Wisconsin Label Corp. v. Northbrook Property & Casualty Ins. Co. Marketing promotions such as a "2 for 1" sale or "buy one, get one free" can often serve as a "loss leader" for businesses interested in getting consumers to try products they have not previously used. But where mishaps in labeling the product promotion lead to more losses than anticipated, this is an uninsured event, not one for which the mislabeling company can obtain standard liability insurance coverage. In 1992, Ameripac contracted with Personal Products Company (PPC) to assemble two separate PPC products into a single promotional package for retail sale. Under the promotion, "a consumer who purchased a box of Maxi-Pads would also receive at no additional charge a box of Panty Shields." The two products were to be packaged together and the bar codes for the two different products were to be covered with a bar code reflecting only the price of the Maxi-Pads, which sold for approximately twice the price of the Panty Shields ($1.16). More than 350,000 of the packages were assembled and distributed to various Wal-Mart stores for retail sale-then the trouble began. Wal-Mart claimed that Ameripac had botched the labeling so that many of the packages, when scanned at the cash register, rang up the lower price of the Panty Shields rather than the higher price of the Maxi-Pads.
- Subjects
WISCONSIN; UNITED States; LEGAL judgments; NORTHBROOK Property &; Casualty Ins. Co.; WISCONSIN. Supreme Court; WISCONSIN Label Group (Company); RETAIL industry; BAR codes; ACTIONS &; defenses (Law); RULES; MARKETING
- Publication
Journal of Risk & Insurance, 2001, Vol 68, Issue 2, p359
- ISSN
0022-4367
- Publication type
Article