Product Recall Insurance can be relevant where withdrawing a product from the market could create significant financial loss.

The exposure is not limited to very large manufacturers.

What businesses can consider the cover? #

Examples include:

• Food and beverage manufacturers.
• Consumer goods manufacturers.
• Importers.
• Distributors.
• Wholesalers.
• Component manufacturers.
• Medical or life sciences businesses.
• Businesses selling products under their own brand.

What factors increase recall exposure? #

These can include:

• Large production volumes.
• Products sold nationally or internationally.
• Products supplied to major retailers.
• Safety-critical products.
• Food or consumable products.
• Products incorporated into another manufacturer’s goods.
• Strong brand dependence.
• Expensive replacement or disposal costs.

What about component manufacturers? #

Component suppliers can have significant exposure.

A relatively inexpensive component may be incorporated into a much more valuable finished product.

If the component needs to be recalled, the financial consequences can extend well beyond the value of the component itself.

Does a small business need Product Recall Insurance? #

Potentially.

The key question is not simply business size.

It is whether the business could absorb the cost of:

• Retrieving products.
• Replacing stock.
• Managing customers.
• Engaging specialists.
• Losing sales during the recall.

Businesses with material recall exposure should consider whether standard liability insurance provides enough protection.