Who needs product recall insurance?

Product recall insurance is specifically designed for manufacturers of 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.  

A voluntary product recall could be your company recognising that one or more of your products could cause bodily injury or property damage.  

An involuntary claim could be by a government agency or a third -party retailer or wholesale distributor who sells your products.

What product recall insurance covers

Product recall insurance covers the costs association with recalling a product. Direct costs of recall 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 to replace and redistribute 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 if you didn’t have cover? Could you lose clients if you’re not insured?

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.