Expert Recall

More and more companies are coming to realize the potential impact of a tougher regulatory environment and educating themselves about recall compliance, recall management and recall preparedness. But not all companies are aware of the potential complexity of a product recall or the availability of recall insurance protection.

Manufacturers, retailers, distributors, and wholesalers would be well served to explore recall insurance options and understand the benefits and pricing available from a growing number of competing recall insurance carriers. Recall insurance policies typically come with coverage limits between $10 million and $25 million and with a variety of deductibles.

Recall insurance policies can cover a variety of risks, including:

• Costs associated with notifying customers
• Shipping costs
• Warehouse or storage space for returned products
• Cost of product disposal
• Cost of additional staff to help with the recall
• Loss of profit
• Litigation expense
• Obligations to a third party, such as a distributor
• Recalls of products sold under a third-party name
• Cost of replacement goods
• Costs related to repairing brand reputation

Other provisions might include assistance with developing a recall plan and protecting the company’s brand and reputation by engaging the services of a crisis communications support team before, during and after the recall event.

Recall insurance policies include benefits that range from $10 million to $25 million, with various levels of deductible and premium schedules.

For just about any company that makes a product of any kind, it is no longer a question if they will face a recall, but when. It just makes good sense to be prepared with a recall plan and a recall insurance policy.