Sounds great in theory but it’s not always possible. For example, not all manufacturers are traceable, some may not have the financial capital to reimburse or could become insolvent if they receive multiple claims. There can also be long delays between the loss and actually receiving the funds from the manufacturer.
Specialist product recall insurance
Recall policies are for clients ranging from SMEs through to large corporates, at any stage of the supply chain. We support clients that are situated across the world with global supply chains and across a vast range of industries including:
- Food and beverage
- Automotive and component parts
- Consumer goods
- Pharmaceutical
- Restaurant
The risks of product recalls and/or contamination are severe exposures. Not only has the amount of recalls risen but there’s also a growing cost associated with each recall. We’re dedicated to working with you to understand your individual and unique needs. These vary depending on what you deem to be most important to you.
For some it’s a company's brand and reputation, for others it’s balance sheet protection and certain financial costs related to product recalls. A few simply want to purchase cover to ensure they can sign a suppliers’ agreement.
We engage with the market to curate tailored solutions which protect your business against the impact of a recall event. We also provide expertise to help navigate certain financial costs and reputational fall out. We understand that each business’ risk profile is the unique and therefore no one solution can be the same.
Key features and benefits
- As long as the product is mass produced, we can assist
- Reduce the cost and stress of a recall
- Identify and mitigate potential recall triggers
- Protect your organisation’s brand and reputation
- Protect customers from a dangerous situation quickly
- Identification and quantification of product risks
- Assessment of controls vs industry standards (e.g. ISO 9001)
- Testing of controls (e.g. product recall)
- Recommendations for risk control improvements
- Informed insurance limits that reflect likely losses
Get a product recall insurance policy now
Get in touch with a product recall insurance expert today.
Product recall insurance covers
- Contaminated products insurance – For companies who manufacture topical or ingestible products such as food (including for pets), beverages, tobacco, cosmetics, pharmaceutical or Canadian cannabis.
- Automotive and component parts recall – This risk transfer solution is designed for component part manufacturers who supply their product to original equipment manufacturers (OEMs). This includes components used in internal combustion engines as well as the newer exposures which come with electric vehicles. We look at one-off contracts or comprehensive coverage for the entirety of your business.
- Consumer products – These policies are tailored for manufacturers, distributors, wholesalers or retailers of finished goods. These range from the weird to the wonderful: clothing, electronics, tools and hardware, children’s toys, sports equipment, shoes, medical products.
- Packaging solution – Customised product recall solutions for packagers and contract packers of topical and ingestible products.
- Restaurant – Restaurant chains and large franchises whereby a customer may suffer a food borne illness as a result of consuming a product purchased on the restaurant premises. Includes restaurants in hotels and start-ups.
Product recall triggers/ insured events
- Contaminated product insurance: Accidental contamination, malicious product tampering, product extortion, adverse publicity and government recall.
- Automotive and component parts: Product safety and product guarantee, government recall, malicious product tampering, adverse publicity, product extortion and impaired property.
- Consumer goods/packaging: Defective products due to manufacturing errors, omissions or design error (as well as malicious product tampering and product extortion and government recall).
- Restaurant: Foodborne illness, supplier contamination, public health authority announcement, malicious tampering, adverse publicity, product extortion, workplace violence and disease outbreak.
What can be insured?
Covered losses as a result of an insured event include:
- first and third party recall costs
- investigation costs
- media announcements
- costs of hiring additional staff and storage
- disposal and destruction
- cost of cleaning premises and machinery
- unsubstantiated recall expenses
- consultant costs
- retail slotting fees
- defence costs
- transportation
- redistribution
- relabelling
- rehabilitation
- repair and replace
- first party business interruption
Plus, key optional extras
Many of these specialist endorsements are only available in the London market rather than regionally. This list is not exhaustive, and the market is constantly adapting to changing risk profiles in order to provide specialised solutions for our clients.
- Contaminated product insurance: Government recall with plant suspension, third party recall liability, intentionally impaired ingredients, fungi, rancidity and pest infestation, animal by-product, religious specification, regulatory advisory (US and Canada), product refusal and naturally occurring organism.
- Automotive and component parts recall: Certain financial costs, first party business interruption, impaired property and malicious interference.
- Consumer Goods: Product guarantee and third party recall liability
- Markets can also provide the option to clients of long-term agreements (24/36 months) subject to a revenue threshold, loss records and no claims bonuses.
What's not insured?
We look at products that are mass produced, not one-off, specialist products. However, due to the specialised nature of the recall market, we aren’t able to give a blanket ‘no’ to any product and we always prefer to have a conversation with you, regardless of where you sit in the supply chain.
Get a product recall insurance policy now
Get in touch with a product recall insurance expert today.
Why choose us for your product recall insurance?
- Our parent company Marsh has a global product recall team with over 50 years of broking experience.
- We have designed and placed insurance programs for some of the largest and best-known brand owners. Our brokers have longstanding relationships with all the major markets, allowing us to negotiate competitively priced deals to manage your risks.
- We have access to around $150 million worth of capacity via the London market, working with top carriers with their own wordings and expertise when it comes to underwriting product recall risk.
- We broke directly with specialist underwriters in the London market rather than having to involve casualty brokers. We’ve worked with them to develop a number of innovative endorsements to further enhance our offering.
- We can provide any client with a benchmark indication. All we’d require is a brief business description and estimated annual turnover.
- We have a team of 7 brokers dedicated to the placement of product recall risks in Bowring Marsh.
- We engage with the wider crisis management team to understand exposures and have access to specialist food safety consultants to give us in depth insight into each clients’ needs.
- Our close working relationship with our liability colleagues allows us to explore cost-effective options.
- As well as the placement team, our team can also call upon experienced and dedicated claims handling experts who’ll manage a claim and advocate on behalf of the client. This spans from the initial notification right through to settlement.
Product recall insurance FAQs
To collect a pricing indication from the market, we just need your business description (couple lines explaining your operations and range of products) and your estimated annual turnover. If you wish to get a formal quote, you’ll need to complete a proposal form.
One third of clients that buy recall insurance think they have a standalone policy. In actual fact, they often only have a recall expense cover extension under a general liability or public liability programme. On average, these policies only cover up to 35% of costs and as low as 2-7% of the overall loss in some cases.
Typically, business interruption costs make up the majority of claims. Critically these expenses are covered under a standalone recall policy but excluded under product recall cover bought via an extension.
Under a general liability policy, there has to be actual bodily injury or property damage to trigger the policy. With our policies, there only has to be the potential.
It’s hard to say as each of our policies are tailor made. Our markets work off models which rate risks according to a range of factors, notably turnover and product type. We can play around with limit, retention and coverage to target your desired pricing.
We work on a case-by-case basis but generally speaking, the minimum premium our markets consider is around $7,500.
Yes! They’ll just need to be declared to underwriters at the submission stage and we’ll also have to check whether they’re countries affected by sanctions laws and regulations.
Yes!
