PRODUCT RECALL INSURANCE

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.

DONT WAIT! ASK OUR INSURANCE SPECIALISTS.

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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 [...]