Neon Manufacturer Liable For Insurance Co.'s Loss

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In the case Zurich Ins. V. Let There Be Neon City, an insurance company sued a neon sign manufacturer on behalf of its insured, a restaurant, for fire damage caused by a defective neon sign. The insurance company raised its claim under the Connecticut Products Liability Act. Product Liability law varies by state. Generally, these rules hold manufacturers liable for placing defective products into hands of businesses and consumers. In the event a product has a latent defect or danger, the manufacturer may be held responsible for whatever injuries may result.

In the case at hand, the insured, a McDonalds, claimed that their neon sign overheated, causing a fire that caused great damage to the McDonald’s premises and property. Zurich Insurance had to pay a substantial amount in repair of this damage. It further alleged that the Manufacturer designed, manufacture and sold a product that was dangerous and defective. Let There Be Neon City moved to strike the Insurance Claim, arguing that Connecticut’s Product Liability law did not cover commercial loses, such as insurance payments.

The court denied the manufacturer’s motion to strike. The court balanced the liability for commercial transactions. On one hand, a limitation of manufacturer liability would mitigate their incentive to protect the public, which includes commercial entities such as Zurich Insurance. However, if this liability was allowed to progress too far, contract law would drown in a sea of liability cases. Therefore, the court did not allow the insurance company to recover for its commercial loss. Nevertheless, Zurich’s claim for property loss was legitimate, thereby denying Neon City’s motion to strike.

At Maya Murphy, P.C., our personal injury attorneys are dedicated to achieving the best results for individuals and their family members and loved ones whose daily lives have been disrupted by injury, whether caused by a motor vehicle or pedestrian accident, a slip and fall, medical malpractice, a defective product, or otherwise. Our attorneys are not afraid to aggressively pursue and litigate cases and have extensive experience litigating personal injury matters in both state and federal courts, and always with regard to the unique circumstances of our client and the injury he or she has sustained. 

Please contact Joseph C. Maya, Esq., at 203-221-3100, or at JMaya@mayalaw.com, to schedule a free consultation.

Source: Zurich Ins. Co. v. Let There Be Neon City, 2002 Conn. Super. LEXIS 3717 (Conn. Super. Ct. 2002)