What is Product Recall  Insurance?

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.



  • Famous Product recall cases, Product insurance

Top 5 Surprising Product Recall Examples

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Manufacturing and selling a product has various risks, regardless of the product type. Product defects are one of the worst situations any product business can face. A product defect is when there is a problem with the product that causes harm to the consumer. After a product defect is reported, another nightmare follows, known as a product recall. Product recall is the procedure when a business professionally requests the public and retail stores to return every product with a defect. Companies have to pay millions to deal with the expenses related to a recall. Product recalls often happen due [...]