PepsiCo Sues Its Insurers Over Defense of San Francisco Ultra-Processed Food Suit

PepsiCo has sued four of its insurers over their refusal to defend it in San Francisco’s ultra-processed food lawsuit, Insurance Business reported Nov. 6. PepsiCo filed the complaint Oct. 23 in New York Supreme Court. The insurers moved the case to the U.S. District Court for the Southern District of New York on Nov. 5.

TLDR

• The defendants are ACE American Insurance Company, ACE Property and Casualty Insurance Company, Westchester Surplus Lines Insurance Company and Vigilant Insurance Company.
• ACE American denied coverage for the San Francisco suit on May 1, 2026, according to the complaint as described by Insurance Business.
• PepsiCo says the same insurer agreed to help defend individual ultra-processed food injury suits.
• The insurers deny breaching any obligation to PepsiCo. No court has ruled on the merits.

The Coverage Dispute

The San Francisco City Attorney sued PepsiCo and other large food makers in December 2025 in San Francisco County Superior Court, NBC News reported. The other defendants include Kraft Heinz, Coca-Cola, General Mills and Nestlé USA. The city alleges the companies marketed ultra-processed foods they knew were harmful.

ACE American denied PepsiCo’s claim on the ground that the city’s suit does not seek damages to compensate for bodily injury, Insurance Business reported. The insurer’s position is that the city seeks only its own economic losses.

PepsiCo argues that the words “compensate for” do not appear in the relevant coverage sections of its policies. It says the city’s claimed costs, including hospital, clinic, Medicaid and employee health spending, fall under policy language covering damages claimed by any organization for care.

The Same Insurer Helped Defend Individual Suits

In June 2025, ACE American agreed to help defend Bryce Martinez v. Kraft Heinz Company, an individual suit alleging ultra-processed foods caused Type 2 diabetes and other diseases, according to the complaint. It reserved the right to raise other coverage defenses.

Eleven days after denying the San Francisco claim, ACE American agreed to help defend five more individual suits with nearly identical allegations, PepsiCo says. PepsiCo asks the court to confirm its insurers must defend it and cover any liability. It also seeks damages for breach of contract, including defense costs it says it has paid itself.

In their notice of removal, the insurers said they deny breaching any obligation to PepsiCo and deny it is entitled to any of the relief requested.

Other Food Makers Have Sued Their Insurers

Kraft Heinz sued Chubb units and Liberty Mutual Fire Insurance Company on Sept. 18, 2026, over coverage for individual ultra-processed food suits and the San Francisco case, Insurance Business reported in September. That case was moved to federal court in western Pennsylvania.

General Mills sued Liberty Mutual and an ACE unit in April 2026 over its ultra-processed food cases. The parties filed a stipulated dismissal on Oct. 2, Bloomberg Government reported. No terms were disclosed.

A federal court in Pennsylvania dismissed a first-of-its-kind individual suit against PepsiCo and other food makers on June 30, 2026, according to PepsiCo’s law firm, Weil. That suit alleged ultra-processed foods caused a plaintiff’s Type 2 diabetes and fatty liver disease.

Why It Matters

Three of the largest U.S. food makers have now gone to court with their insurers over ultra-processed food claims in 2026. The PepsiCo case turns on whether a city’s health care costs count as damages because of bodily injury. Insurance Business reported that the answer could shape how insurers handle the growing number of ultra-processed food claims. The San Francisco suit itself has not been decided.

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Sources: Insurance Business, on PepsiCo’s complaint (Nov. 6, 2026); Insurance Business, on Kraft Heinz (Sept. 23, 2026); Bloomberg Government, on General Mills; NBC News, on the San Francisco suit; Weil, Gotshal & Manges.