Harford Mutual Ins. Co. v. Moorhead – Case Brief Summary (Pennsylvania)

In Harford Mutual Ins. Co. v. Moorhead, 396 Pa. Super. 234, 578 A.2d 492 (1990), the Pennsylvania Superior Court concluded that a products hazard exclusion did not apply to allegations of negligent failure to warn. In that case, manufacturers of wine making supplies marketed a sulphur strip that was designed to prepare a vessel for use in the fermentation of grapes. The strip would be ignited and placed inside the fermentation container in order to kill bacteria.

The customer placed the strip inside a former whiskey barrel, which exploded because of the presence of alcohol vapors.

Litigation followed, with plaintiffs asserting, inter alia, that the defendants were negligent in failing to warn of the dangers posed by lighting the strip.

In a declaratory action initiated by the defendants' insurer, the trial court entered judgment in favor of the insured. The insurer appealed, contending that the "essence" of the underlying complaint was one of products liability, and not negligence, regardless of how drafted.

The Pennsylvania Superior Court agreed with that argument, explaining:

Alleged negligence which does not involve the sale of a defective product is of a type which "occurs occasionally in the course of business and is a risk for which businesses buy general coverage." ... To construe a "Products Hazard" exclusion to apply in a suit later brought against an insured where the product sold was not the cause of the damage, but was merely an incidental instrumentality through which the damage was done, would defeat the purpose of purchasing such a policy by rendering meaningless much of the stated coverage. ... Thus, we conclude, as did this Court in Friestad v. Travelers Indemnity Co., 260 Pa. Super. 178, 393 A.2d 1212 (1978), that the "Products Hazard" exclusion applies only when a product, rather than a service, is the alleged cause in fact of damages or injury to a third person. (Moorhead, 396 Pa. Super. at 242, 578 A.2d at 496.)