Product Recall Insurance is designed to help businesses manage the financial consequences of an insured product recall.

A recall can create substantial costs even where no third party has yet made a bodily injury or property damage claim.

What can trigger a product recall? #

Depending on the policy, insured events can involve matters such as:

• Accidental contamination.
• Product defects.
• Safety concerns.
• Malicious tampering.
• Government-directed recalls.
• Other specified circumstances creating a recall risk.

The triggers vary significantly between Product Recall policies.

What types of businesses can face recall exposure? #

Examples include:

• Manufacturers.
• Importers.
• Wholesalers.
• Distributors.
• Food and beverage businesses.
• Consumer product suppliers.
• Component manufacturers.
• Retailers with private-label products.

A business does not necessarily need to manufacture the product itself to have recall exposure.

Why can a recall be expensive? #

Costs can extend well beyond physically retrieving the product.

A recall can involve:

• Customer communication.
• Transport and collection.
• Disposal.
• Replacement products.
• Professional advisers.
• Crisis management.
• Lost sales.
• Reputational recovery.

The extent to which these costs are insured depends on the Product Recall policy.