PRODUCT RECALL INSURANCE
What is Product Recall Insurance?
A Product Recall is an act of removing a batch or production run of products from the marketplace.
The insurance covers expenses associated with recalling a product. Product recall insurance should be purchased by any product business, such as food, beverage, toy, and electronics companies.
Recall insurance reimburses policyholders for financial losses sustained when a product is recalled. Product recalls can be involuntary (required by a regulatory agency or the government) or voluntary (the manufacturer notices a defect that is unlikely to force an involuntary recall), and can be costly.
What is covered?
Product recall insurance will cover costs such as:
- Customer Notification– Informing each customer that has bought that product not to use the product and inform the company to be recalled.
- Shipping Costs: Transportation to get all the products back to the main manufacturer.
- Warehouse and Storage expenses: The company may need to hire more storage to store the recalled products.
- Disposal Costs: to safely dispose of the product without causing any more harm when disposing of it.
- Over Time Work: where the company has to pay their employees overtime to solve the problem.
- Brand Repair: cost to help the business re-grow from the recall incident
What should you know?
A product recall can have long-lasting and costly consequences for your business, affecting reputation, productivity and employee morale. It is essential to avoid product recall by
- Understanding product safety standards and regulations within your industry.
- Assessing manufacturing process and safety.
- Performing regular quality checks
- Being prepared for the worst, having a plan and insurance to execute the plan if things go wrong.
There are several reasons product businesses must purchase product recall insurance and benefit from the insurance.
LATEST PUBLICATIONS
Industries With The Most Product Defect Claims
There are millions of products created and sold daily all over the world. Every product business has a duty to provide the best product they can while also making sure it is safe for the intended customers. There is always a chance a product may not be as safe as a company may believe. Products could cause customer injury or property damage. Either way, the business involved will be held legally liable, which includes the designer, manufacturer and distributor. Each product falls under a specific industry, and each industry makes a range of different products. For example, a computer [...]
Reasons Businesses Need Product Recall Insurance
Most product companies always keep consumer safety as the number one priority when releasing products. Products include food, [...]
Top 4 Insurances Needed To Cover Product Risks Claims
The goal of many companies is to provide a product that fills a market gap. Every day there [...]
Ultimate Risk Management Strategies to Protect Your Business
Over the years, there has been an increase in business risks. Risks are anything that negatively impacts the [...]