Product Recall Insurance

We offer product recall insurance, also called product withdrawal insurance, to manufacturers, distributors and retailers in all industries from various insurance companies. Product recall insurance is designed to cover the costs related to the voluntary or involuntary recall of products that have left the manufacturing facility. Product recall insurance can be purchased as a standalone policy or can be added to a commercial general liability policy through an endorsement. The main advantages of a standalone product recall policy is that it usually offers higher policy limits and greater coverage that can be tailored to an insured's specific needs.

Product recalls are getting more common and more expensive, with thousands of recalls that are announced every year. The cost of a single product recall can be in the millions of dollars and is sufficient to bankrupt a business. A product recall not only impacts manufacturers, but also impacts all entities that are downstream, including retailers. Product recall insurance is therefore one of the most important coverage that any entity that places products on the market should have.

It is vital for manufacturers, distributors and retailers to mitigate their product recall risk through a product recall insurance policy with adequate coverage and policy limit.

What coverage is provided by product recall insurance?

In general, product recall insurance is designed to provide coverage for the reasonable and necessary extra costs associated with the recall of a product, such as the following*:

* These are general examples of coverage. Coverage varies between insurance companies. Please review the policy for the exact coverage, including limitations and exclusions.

Standalone product recall insurance policies may also provide a liability coverage that provides protection for the insured in connection with damages that the insured becomes liable to pay to third parties due to a product recall.

Due to the legal and cost uncertainties surrounding the recall of products, it is important for manufacturers, distributors and retailers to have product recall insurance in place with an adequate policy limit.

What's the difference between an occurrence and a claims made policy?

Product recall insurance policies are available on both an occurrence and a claims made basis.

An occurrence policy covers claims incurred during the policy period, even if the claim is reported after the policy expires. Occurrence policies are widely used in other lines such as automobile and homeowners insurance.

A claims made policy covers claims reported during the policy period, as long as the claim was incurred after the retroactive date. The retroactive date is usually set as the first day of coverage of the first claims made policy ever purchased and should not be changed at policy renewal. The policy must be renewed every year in order to keep the coverage for prior acts. However, if the claims made policy is nor renewed and a claim is subsequently reported, no coverage will be available even if the claim was incurred while a policy was in effect. To remedy this situation, a tail endorsement is available to be purchased when an insured decides to cancel or non-renew their policy.

Give us a call to discuss your product recall insurance needs.

We operate in the following states: Arizona, Arkansas, California, Colorado, Connecticut, Delaware, Florida, Georgia, Illinois, Indiana, Iowa, Kansas, Louisiana, Maine, Maryland, Michigan, Minnesota, Missouri, Nebraska, Nevada, New Jersey, New York, North Carolina, North Dakota, Ohio, Oregon, Pennsylvania, Tennessee, Texas, Utah, Vermont, Washington, Wisconsin, Wyoming