Downtown Portland, Oreogn

Product Recall Liability Insurance

Product Recall insurance provides protection in the event you must recall any of your products.

Do you need Product Recall Liability Insurance?

It’s a good question. Like so many questions in the insurance world, the answer is: it depends.

You’ll want to consider the likelihood of your products facing a recall. It’s hard to say what product is at risk for a recall. You can check out the United States Consumer Product Safety Commission for an idea of products that have previously been recalled. Some recent product recalls include:

  • Mini trampoline
  • Sleeper chair folding foam bed
  • Flashlight
  • Bicycle gear hub
  • Turkey fryer

As recognized above even if you manufacture seemingly harmless products, such as a flashlight, you could face a recall.

The coverage trigger for Product Recall Liability Insurance is malicious or accidental product contamination. The following is a brief outline of what protections are provided within a Product Recall Liability Insurance policy.

Costs include the following:

      1. Cost associated with notifying customers
      2. Shipping Cost
      3. Extra warehouse and storage expense
      4. Actual cost to dispose of the products
      5. The cost of extra personnel required to conduct the recall
Loss of profit on the products that were recalled.
The cost associated with hiring independent contractors and other temporary employees and related expenses to get sales back in place.
The cost of public relations consultants and recall consultants to assist in the investigation of (and/or response to) a recall event.
“Customer loss of gross profit” means loss of “customer gross profit” incurred by your direct customer , and for which you would be legally obligated to reimburse or pay that customer, and which is caused solely and directly by an “insured event”.

Product Recall Liability Insurance Costs

Product Recall Liability Insurance costs are based on a number of factors which include:

  • Type of Operation
    • Consumable Products:
      • Manufacturer
      • Co-Packer
      • Packaging
      • Bottler
      • Importer
      • Wholesaler
      • Retailer
      • Distributor
      • Supplier of Ingredients
    • Consumer Goods:
      • Manufacturer
      • Importer
      • Wholesaler
      • Distributor
      • Exporter
      • Retailer
  • Type of Product
    • Consumable Products including:
      • Nuts
      • Snack
      • Vegetables
      • Fruits
      • Dairy
      • Meat/Poultry
      • Fish/Seafood
      • Bakery
      • Beverage
      • Soups/Sauces
    • Consumer Goods including:
      • Toys
      • Appliances
      • Cloths
      • Electronics
      • Furniture
      • Hardware
      • Educational
      • Sports Equipment
      • Computers
      • Games
  • Supplier details including
    • How many are foreign and how many are domestic
    • Are supplier standards monitored
  • Business experience
  • Gross sales
  • Coverage & limits chosen
  • Loss history

Reach out to me when you’re considering Product Recall Liability Insurance. I will discuss with you how it works and assess if it fits into your risk management needs. If you determine this coverage is needed I will then provide you with comparative Product Recall Liability Insurance quotes from multiple insurance carriers so you can get the best possible rate.

As an insurance broker I help businesses throughout Oregon and the Pacific Northwest manage risk.