Recall Insurance
As a result of new recall regulations that are more stringent and recall effectiveness that is increasingly critical to business survival, the insurance industry now offers manufacturers, wholesalers, retailers and distributors expanded recall insurance options designed to cover the costs associated with all aspects of the recall process.
Manufacturers subject to Consumer Product Safety Commission (CPSC) or Food and Drug Administration (FDA) regulations are taking the time to fully understand the depth and breadth of their current coverage and carefully investigate the latest recall insurance coverage available to underwrite the total cost of the extensive recall logistics involved in managing a recall.
Many standard liability policies already have a “recall” endorsement that might give policy holders a false sense of security. But these standard endorsements often fall far short of providing the insured with the recall preparedness assistance they need. Recall insurance coverage, however, includes recall preparation support as well as coverage for direct expenses related to a product recall, including recall logistics and crisis communications support.
With the daily headlines filled with news of major product recalls, senior corporate leadership and boards of directors are taking a closer look at how well prepared they are for recall risk mitigation. Recall insurance is increasingly becoming an integral part of the plan.
