Chipwich Maker Withdraws Lawsuit Against Insurance Agency

The maker of Chipwich ice cream sandwiches has withdrawn its lawsuit alleging that its insurance agency was negligent in failing to properly secure product recall insurance.

Frozen food manufacturer Crave Better Foods (CBF) of Greenwich, Connecticut, had blamed Carlson & Carlson, Inc. (C&C), an insurance broker in Riverside, Connecticut, for leaving it unprotected for a product recall of Chipwich products that it claims resulted in a $4.5 million loss.

The court filing on July 30 did not indicate the reason for withdrawing the suit or whether a settlement had been reached. The companies and lawyers have not yet responded to requests for information.

In September 2025 a judge denied the insurance agency’s motion to dismiss the breach of contract claim. A jury trial had been scheduled for February 2027.

As a result of the recall, CBF claims it incurred more than $4.5 million in costs including destroyed inventory; costs of goods sold; excess freight charges; customer deductions; and lost sales, according to the complaint filed in Connecticut Superior Court in March 2025.

Ice Cream Sandwich Maker Blames Agent for Lack of Recall Insurance After $4.5M Loss

CBF accused the insurance agency of professional negligence, breach of contract, and negligent misrepresentation.

In its defense, the insurance agency claimed that CBF bore responsibility because it signed off on the policy, that there had been no agreement to obtain product recall insurance, and that CBF failed to take proper steps to mitigate damages. The agency further argued that CBF’s losses were caused by its third party ice cream manufacturer, Totally Cool Inc., and by CBFs failure to ensure that the manufacturer maintained proper standards and had sufficient insurance to indemnify its customers like CBF affected by the recall .

According to the original complaint by CBF, C&C procured a general liability insurance policy with coverage and premiums based on an estimated $100,000 in sales. The policy contained an exclusion for liability based upon product recalls. In June 2018, when its revenue was $800,00, CBF advised C&C that it “does not want Product Recall right now.”

By the end of 2021, CBF said its sales exceeded $4.2 million, resulting in a large increase in its insurance premiums. By the end of 2023, CBF had annual sales revenue of $24.4 million.

Despite CBF’s increase in sales, the complaint maintains, C&C never circled back on the issue of recall insurance,”despite the fact that recall insurance is generally recognized as a basic necessity for manufacturers of food products.”

CBF maintains that it became aware of the gap in its coverage only after Totally Cool discovered that certain products may have become contaminated with listeria monocytogenes. Totally Cool immediately initiated a recall of its ice cream products including Chipwiches and products from Hershey’s, Friendly’s, and Jeni’s.

None of CBF’s equipment at the Maryland facility tested positive for listeria. Nevertheless, the recall resulted in the destruction of approximately $900,000 of Chipwich products in inventory and $1.2 million in product on its customer’s shelves, according to the complaint.