Product Recall Insurance can provide broader protection than simply paying the direct cost of collecting a product.

The exact cover depends on the policy and insured event.

What recall expenses can be covered? #

Depending on the policy, insured costs can include:

• Locating affected products.
• Customer notifications.
• Transport and collection.
• Storage.
• Disposal or destruction.
• Additional labour.
• Professional advisers.
• Crisis management consultants.

Can replacement or refund costs be covered? #

Some Product Recall policies can cover certain costs associated with:

• Replacing affected products.
• Repairing products.
• Refunding customers.
• Restoring products to a saleable condition.

These costs should not be assumed to be included under every policy.

Can lost profit be insured? #

Depending on the wording, Product Recall Insurance can include Business Interruption or loss of gross profit arising from an insured recall event.

This can be significant where a product is removed from sale for an extended period.

What about malicious tampering? #

Some specialist Product Recall policies can include malicious product tampering or extortion exposures.

These sections can have their own definitions, limits and conditions.

Does Product Recall Insurance pay every cost associated with a recall? #

No.

The policy will contain:

• Defined insured events.
• Exclusions.
• Limits.
• Excesses or retentions.
• Notification requirements.
• Conditions concerning how the recall is managed.

Businesses should notify the insurer promptly when circumstances could lead to a recall.