An insurer that paid $2.5 million after a gas station fire just lost its shot at recovering the money from the fan's maker. 

On August 11, 2026, the Eighth Circuit affirmed a ruling in Broan-Nutone's favor, rejecting Berkley National Insurance Company's effort to recoup what it paid its insured, Lakes Community Cooperative, after a bathroom ceiling fan caught fire. 

The fire broke out on November 20, 2021, in the restroom of a gas station the Cooperative owned. A Broan ceiling fan sparked the blaze, causing $2,549,713.32 in damage. Berkley paid the claim, then stepped into its insured's shoes and sued Broan as subrogee - the move that lets an insurer pursue whoever it believes caused the loss. 

Berkley blamed a manufacturing defect. Its expert reported that "[t]he source of ignition was the heat produced within the motor winding," heat that "ignited the nearby combustible materials including electrical insulation, and any accumulated dust and lint." The expert also said a "thermal protection device did not operate as intended and failed to disconnect electrical power" before the windings overheated. 

But the case turned on timing. Under Minnesota law, a manufacturing defect claim requires proof that the defect existed when the product left the maker's control. This fan had been installed before the Cooperative bought the store in 2009 - more than ten years before the fire. The court called that a significant period that gave "substantial opportunity" for mishandling or misuse. 

The expert's deposition didn't close the gap. He believed the "fan motor was operating at an abnormally high temperature," but "d[id] not specifically know the mechanical reason why." He offered no admissible evidence comparing the burned fan to one in flawless condition, and nothing linking the alleged defect back to manufacture. 

He also pointed to "accumulated dust and lint" in the fan at the time of the fire - but showed nothing to place that debris there when the fan left Broan, or to tie it to a defect. Berkley's point that Broan's design invited dust buildup was, the court said, a design defect argument with no place in a manufacturing defect claim. 

The takeaway for insurers and subrogation teams: proving a product failed is not the same as proving it left the factory defective. The expert has to bridge that gap, and a decade-old installation makes it a long reach.