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Product recall insurance
Protect your business from potential product recall costs
Product recall insurance covers the reasonable costs and expenses incurred by a business if they have to remove a product from public circulation.
Regardless of your business size or the stringency of your risk management or food safety programme, you may still experience a product recall. Product recalls can be expensive, time-consuming and may damage your brand. This leaves your market share, reputation, and consumer confidence at risk.
Our brokers can help you find the right product recall cover to support your business in the event of a recall. This includes products like food, beverages, pharmaceuticals or any other contaminated products that are unsafe for human ingestion and continued public circulation.
Who needs product recall insurance?
Product recall insurance is specifically designed for manufacturers of consumer products used for consumption. This includes:
- any business manufacturing, supplying or distributing products for human ingestion or use
- manufacturers, producers, suppliers and retailers of foods
- manufacturers, producers, suppliers and retailers of pharmaceuticals, cosmetics
- manufacturers of consumer durables such as children’s toys, whiteware and home appliances
Product recalls can be voluntary or involuntary as long as the grounds for an imminent threat are met.
Your company may issue a voluntary product recall for one or more items. This could occur after identifying product contamination or defect that may cause bodily injury or property damage, often due to unforeseen complications during manufacturing.
An involuntary claim can also be mandated by a government agency. Third-party retailers or wholesalers distributing your products may also request a recall or take action if they identify product contamination or safety concerns.
Recalls are intended to protect customers from contamination, defects or any other safety risks. However, the financial and reputational ramifications for businesses can be significant. That’s why our brokers can arrange product recall liability insurance tailored to your business needs.
What product recall insurance covers
Product recall insurance covers the costs associated with recalling a product. Direct costs of recalled products are often only a fraction of the true cost to the business.
Costs and expenses come in many forms:
- Recall costs - The costs incurred in recalling, inspecting and destroying the affected product, as well as advertising and extra labour.
- Third-party recall costs - Costs incurred by a third party where your insured product is an ingredient in their product.
- Consultant costs - Costs associated with specialist recall or crisis consultants.
- Replacement costs - The cost of replacing and redistributing the affected product.
- Business interruption - Loss of profits and expenses resulting from a possible decline in sales.
- Rehabilitation expenses - Costs incurred to return sales to pre-incident levels; PR and advertising costs to promote the brand again.
- Extortion costs - Ransom monies, negotiation costs, loan interest or increased security.
Could you afford to meet the cost of a product recall for your food, beverages or other consumer goods if you didn’t have coverage? Without food recall insurance, there is a higher risk of losing money, customers or your positive brand awareness.
Our brokers can offer you options on protection for a range of product risks, including product contamination and general public and product liability. In the event of a claim, we will work as your advocate to get a fair resolution for your business.