Genetic Engineering – GMOs

A Genetically Modified Organism (GMO) or a Genetically Engineered Organism (GEO) is an organism whose genetic material has been altered using Genetic Engineering (GE) techniques. GE is a process in which genetic information is selectively modified by transferring known genetic material from one organism to another, thereby transferring new characteristics to the recipient organism. Experts believe that GE has unlimited potential applications, including research, industrial, agriculture, medical products and pharmaceuticals. Corporate investment in GE products has been significant and the potential for liability is great, meaning that both the companies that make agricultural products and their insurers are monitoring legislative responses to food safety and environmental risks.

Background

A genetically modified organism (GMO) is a plant, animal, or microorganism whose genetic structure has been modified to express a desirable trait. The goal of genetic engineering (GE) in agricultural crops is to enhance flavor, improve nutritional qualities, produce higher crop yield, protect plants from insect pests, increase resistance to herbicides and diseases, and create plants with stronger tolerance to extreme environmental conditions. Similarly, genetic engineering can be applied in medical applications to develop targeted cell therapies, produce biopharmaceuticals in mass, and engineer mRNA vaccines.

Agricultural use of GE crops has steadily increased since its commercial introduction in 1996. In 2000, only 1-2% of planted acres of corn was of GE variety. However, by 2025, more than 90 percent of U.S. corn, upland cotton, and soybeans are produced using GE varieties. It is estimated that 75% of processed foods – from soda to crackers and condiments – contain GE ingredients.

Foods from GE crops must meets the same safety standards as foods derived from traditional selective breeding, according to The Food and Drug Administration, the U.S. Department of Agriculture (USAD), and the Environmental Protection Agency (EPA). Corn and soybeans are the most common GE crops in the U.S. and are often used as key ingredients in food products, such as corn starch, corn syrup, corn and soybean oil, salad dressings, bread, and easy snacks. In addition to corn and soybeans, other common GE crops include apples, canola, papayas, potatoes, and squash.

However, the marketing of GE medical or agricultural products is not without risks or potential consequences. These concerns are amplified by the fact that hundreds of companies, from small research boutiques to Fortune 500 chemical and pharmaceutical giants, are investing billions of dollars in GE applications.

Injuries and Damages

The risk of injuries and damages associated with GE products generally involve food safety and environmental risks. Specific concerns include:
• an increased antibiotic resistance in pathogenic bacteria that could become increasingly immune to treatment;
• an increase in allergic reactions, as well as the development of new allergens;
• threats to biodiversity;
• damage to ecosystem balance;
• the unintentional transfer of genes to plants which could become “superweeds”;
• the unintentional crop contamination by patented seeds or pollen through drift caused by winds; and
• the production of toxins and pathogens.

The unintended contamination of crops through “genetic drift” can occur when a farmer’s non-GMO crop is exposed to genetic material from a neighboring GE crop. For example, if a non-GMO field is planted downwind from a GE field, cross-pollination may be difficult to avoid. Contamination can also occur when GE seeds from a previous harvest sprout as “volunteers” in non-GMO fields or when farmers plant GMO seeds without entering into the required technology agreement with the seed company. Concerns over such contamination have led to legal disputes. In 2011, a coalition of more than 80 family farmers, agricultural organizations, and seed businesses filed a preemptive lawsuit challenging Monsanto’s patent. The plaintiffs argued that cross-pollination and “seed drift” could introduce Monsanto’s patented GMO traits onto their properties, potentially threatening their organic certification.

In 2000, StarLink corn, a GE product FDA approved only for animal feed, entered the human food supply. Although few allergic reactions were reported, the incident prompted considerable media attention and public concern. The fallout included product recalls, expensive cleanup operations, loss of overseas trade, and lawsuits.

Legislation and Regulation

Three federal agencies regulate GMOs in the U.S. to ensure the products are safe for human, plant, and animal health, in addition to the environment. The Coordinated Framework for the Regulation of Biotechnology was established in 1986 to determine how the FDA, EPA, and USDA would work together to regulate GMOs. Overall, the regulatory focus remains on the products themselves, rather than how they are produced.

Food and Drug Administration regulations

Under the Federal Food, Drug, and Cosmetic Act (FFDCA) and the Public Health Service Act, the FDA regulates most human and animal food, ensuring that the foods with GMO ingredients meet the same safety standards as non-GMO food. For GM crops intended for human or animal consumption, the FDA adopted a policy in the early 1990s that treats most GM crops as "substantially equivalent" to non-GMO products. As a result, such crops generally do not require premarket approval and are considered "Generally Recognized as Safe" (GRAS) under the FFDCA.

The FDA may impose stricter requirements when genetic modification results in the expression of foreign proteins that differ materially in function, structure, or composition from naturally occurring plant proteins and may pose risks to human health. Under these circumstances, the FDA may require premarket approval of food additives under the FFDCA, regardless of whether they were developed through biotechnology.

The FDA has also conducted a voluntary consultation process with GM crop developers before commercialization. During this process, the agency reviews safety data, including assessments of toxicity, allergenicity, and the characteristics of the modified plant. If the data verifies safe practices, the FDA permits the product to enter the market. Critics argue whether the voluntary nature of the process limits regulatory oversight. For example, crops engineered to produce pharmaceuticals or industrial compounds may fall outside the FDA's review unless the gene product contaminates the food supply. In such cases, the contaminated crop may be deemed adulterated and subject to recall. Critics believe that these circumstances may delay regulatory intervention until after contamination has occurred.

U.S. Department of Agriculture regulations

The U.S. Department of Agriculture regulates plant GMOs through its Animal and Plant Health Inspection Service (APHIS) as provided for by the Plant Protection Act. The USDA ensures that GMO plants are not harmful to other plants; however, the type of GMO determines the level of regulation. Under the Plant Protection Act, a regulated GM plant must receive approval from the Animal and Plant Health Inspection Service before being introduced.

Environmental Protection Agency regulations

The Environmental Protection Agency (EPA) regulates pesticides and microorganisms to protect human health pursuant to the Federal Insecticide, Fungicide and Rodenticide Act and the Toxic Substances Control Act. The EPA regulates the safety of substances that protect GMO plants and make them resistant to insects and diseases. For example, plants modified with short genetic sequences of Bacillus thuringiensis (Bt), a soil-dwelling bacterium used as a biological pesticide, can produce toxins in their systems to protect themselves from non-beneficial insects. In situations where a crop has been genetically engineered to carry the Bt gene toxin, the EPA requires that the developer carry out both an analysis of food safety to ensure that the foreign protein is not allergenic and verify the environmental safety of the toxin. Before registering a new pesticide, the EPA must approve that using the pesticide “will not generally cause unreasonable adverse effects on the environment.”

Liability and Insurance

The categories of potential defendants in GE lawsuits depend on the injury alleged. For example, litigation that includes allegations of food contamination could include farmers, grain elevator operators, grain traders, millers, food manufacturers and processors of food, distributors and food retailers.

Applicable insurance coverage for GE-related occurrences can cover several insurance product lines. General liability and product liability insurance products might protect against exposure to property damage claims arising from accidental commingling during farming, harvesting, storage, transport or processing, or from contamination of non-GE crops and food with GE counterparts via gene transfer by cross pollination. However, losses due to GMO cross-pollination are usually excluded from coverage due to the “incalculability of associated risks”, according to experts.

For example, a shipment of grain exceeding the maximum allowable level of GE content could be rejected by foreign importers and trigger a claim based on commingling. General or product liability claims could also arise from bodily injury due to the ingestion of GE food that allegedly causes antibiotic resistance, allergic reactions or exposure to toxins or pathogens. Other claims could arise in relation to product recall, environmental liability, director’s and officers’ liability and Seedmen’s error and omissions liability policies, which are designed to cover an insured's liability for claims such as failure to germinate, errors in germination tests, and mislabeling.

Litigation

GE products present a spectrum of potential litigation risks due to their widespread commercial, environmental, and public health effects. Claims may involve delayed-manifestation issues like those arising in asbestos, environmental contamination, and other emerging latent exposure cases.

Coverage disputes in litigation could include known risk, known loss, trigger of coverage, bodily injury, property damage, pollution exclusions, and product exclusions. Claims-made and occurrence-based policies may respond differently, particularly where alleged injuries or contamination develop over time.

These disputes are likely to generate unique allocation of issues, settlements, and court decisions that could vary significantly by jurisdiction. Experts predict that the result of the coupling of significant legal wrangling with cutting-edge scientific technology will be protracted from discovery and expensive litigation.

In re Chipotle Mexican Grill, Inc. Marketing and Sales Practices Litigation (2019)
Consumers alleged that Chipotle's marketing misrepresented certain products as “non-GMO” despite the company's use of meat and dairy sourced from animals fed genetically engineered feed. The litigation focused on whether Chipotle's advertising and labeling practices were likely to mislead reasonable consumers regarding the presence of genetically modified organisms within its supply chain. Chipotle denied liability but agreed to a $6.5 million settlement.

Monsanto Canada Inc. V. Schmeiser (2004)
Monsanto sued a Canadian farmer, claiming that the farmer cultivated and harvested canola containing Monsanto's patented glyphosate-resistant gene without authorization. The defense claimed that Monsanto's patented seeds blew onto his property and cross-pollinated. The court concluded that patent protection extended to the patented genetic material contained within the plant. Although infringement was established, no damages were awarded because the farmer derived no proven financial benefit from the patented trait.

Monsanto Co. V. Bowman (2013)
The U.S. Supreme Court unanimously held that the doctrine of patent exhaustion did not permit a farmer to reproduce patented genetically modified seeds through planting and harvesting without the patent holder's permission. The Court reaffirmed that purchasers may use or resell patented products but may not create new generations of patented inventions.

Natural Grocers and the Center for Food Safety v. USDA (2026)
Natural Grocers and the CFS challenged the USDA's certification for genetically engineered products. The plaintiffs argued that the process could mislead consumers about the difference between GMO and bioengineered. The court found that the USDA excluded highly processed oils and sugars from labeling and required the USDA to incorporate more transparent labeling.

Center for Food Safety v. USDA(2025)
The Center for Food Safety has challenged multiple USDA approvals and deregulation decisions involving GE crops. Generally, their cases allege violations of the National Environmental Protection Act, including risks from gene flow, herbicide resistance, and impacts on conventional and organic agriculture.

Future Outlook

The future of genetic modification transcends agriculture to healthcare to climate control. The Alliance for Science at Cornell University is developing corn that resists insects and droughts for use in Africa. If farmers and scientists develop a mechanism to do this organically, they will save money on fertilizers and pesticides. In the lab, gene-editing techniques like CRISPR are used to precisely edit genetic material and insert superior DNA. The ability to change a single base pair of DNA has the potential for enormous worldwide benefits. For this reason, the 2020 Nobel Prize in Chemistry was awarded to the scientists behind CRISPR. Additionally, while we cannot fix climate change or make all agriculture sustainable, GE crops can help farmers adapt to the changing nature of our world. Fortune 500 chemical and pharmaceutical giants have invested billions in GE technology that will revolutionize modern agriculture by increasing crop yield, enhancing nutritional value, reducing the need for agricultural chemicals. In the future, GMO farmers may need to complete Environmental Impact studies to get approval from the USDA. While the possibilities of unanticipated societal benefits and immense corporate profits from GE are huge, the costs of its occasional failures are likely to be correspondingly expensive from an insurance standpoint.