Understanding the Product Recall trigger Product Recall Insurance provides protection in the event any of your products pose an imminent threat of bodily injury or property damage. It does not provide coverage for defective products that simply do not work and are not a threat to cause bodily injury or property damage.

What is covered under product recall insurance?

Product recall insurance covers expenses associated with recalling a product from the market. Product recall insurance is typically purchased by manufacturers such as food, beverage, toy, and electronics companies to cover costs such as customer notification, shipping costs, and disposal costs.

What are product recall costs?

This effect on consumers can result in significant long term financial losses for a company due to loss of sales. Food recalls cost companies an average of $10 million in direct costs alone, according to a study by the Food Marketing Institute and the Grocery Manufacturers Association (GMA) in the US.

Can a product be recalled for property damage?

It does not provide coverage for defective products that simply do not work and are not a threat to cause bodily injury or property damage. In other words, the trigger for Product Recall Insurance is the same for Product Liability Insurance – bodily injury and property damage.

What is the purpose of product recall insurance?

Product Recall Insurance provides protection in the event any of your products pose an imminent threat of bodily injury or property damage. It does not provide coverage for defective products that simply do not work and are not a threat to cause bodily injury or property damage.

How does insurance work for commercial property damage?

Commercial building insurance aims to cover the landlord for repair costs in the event of damage. If a severe storm damages the roof and it needs replacing, your commercial building insurance can pay for the replacement roof, minus your excess. If your property burned to the ground, building insurance could pay for the entire rebuild.

Where can I get advice on product recall insurance?

Visit the Product Liability and Product Recall Resource Library for advice, a checklist and guidelines from the Consumer Product Safety Commission. To speak with an expert about Product Recall Insurance contact Paul Owens.