Product Liability Insurance and Product Recall Insurance address related but different risks.

A business can potentially need both.

What does Product Liability Insurance cover? #

Product Liability Insurance can respond to certain claims where a product allegedly causes:

• Personal injury.
• Property damage.

Depending on the policy, it can also cover associated legal defence costs.

What does Product Recall Insurance cover? #

Product Recall Insurance is focused on the financial impact of removing, replacing or managing an affected product.

Depending on the policy, this can include:

• Recall expenses.
• Collection and transport.
• Disposal.
• Replacement or repair.
• Crisis management.
• Lost gross profit.
• Customer rehabilitation costs.

Doesn’t Product Liability already include recall cover? #

Some liability policies include a limited Product Recall Expenses extension.

However, this should not be assumed to provide the same breadth of protection as specialist Product Recall Insurance.

The extension may have:

• A relatively low sublimit.
• Restricted insured expenses.
• Narrow triggers.
• No cover for lost profits or replacement costs.

Can a recall occur without a Product Liability claim? #

Yes.

A business may recall products because of an identified safety issue before any customer has suffered injury or property damage.

The financial costs of the recall itself can still be substantial.

How should the policies be considered together? #

Product Liability Insurance protects against specified liabilities to third parties.

Product Recall Insurance can address specified first-party financial losses arising from the recall process.

The actual overlap and gaps depend on the policy wordings.