Tougher regulation has made product recall rife. Even as regulators wield higher fines, many consumer-facing industries – food and drink to pharmaceutical, as well as consumer goods and automotive – often overlook recall insurance. Some businesses only focus on the cost to retrieve the products, which can be as little as 5% of the overall expense, or think they can recover costs under another insurance policy and then find they can’t.
The right insurance coverage
In a recall situation, there is more at stake than just the cost of recalling the product such as the loss of gross profit because the products can’t be sold. There’s also the cost of campaigns such as special offers to restore sales after a recall as well as the cost of crisis consultancy to rebuild consumer confidence. With the right insurance coverage though, you can protect your balance sheet and your reputation.
We enable you to pre-empt sector-specific risks and prepare for what is a complex claims process by, for example, recording your accounting data in a format that can show you’ve suffered a financial loss. We can also review contracts from your clients to make sure your insurance policy covers your obligations to them.