Recover the losses due to recall with product liability insurance
Product recalls are one of the most damaging events a business may encounter, and the consequences can be overwhelming. Each year, the number of product contamination and recall incidents continue to rise, especially in the food and beverage, consumer product and automotive sectors. A product liability insurance can save you a significant amount of money if any product recall incidents happens with your business.
The insurance covers expenses associated with recalling a product from the market. Product recall insurance is typically purchased by manufacturers such as food, beverage, toy, and electronics companies to cover costs such as customer notification, shipping costs, and disposal costs. Coverage generally applies to the firm itself, though additional coverage can be purchased to cover the costs of third parties.
Why you should have a product recall insurance?
It may be hard to believe, but product recalls happen frequently, almost every other day. Some are significantly huge that it even ends up hurting the company’s reputation. Samsung recalling about 2.5 million phones after complaints of overheating and exploding batteries is one of the most infamous product recalls in recent times. Most of the product recalls happens in food products and drugs. In fact, drug related product recalls in 2019 were 371% higher than drug related product recalls in 2012.
Governments around the world are implementing more stringent product safety protocols. It has in fact become even more stronger in light of the ongoing pandemic. The exports of Indian products have increased multifold in the recent years. Therefore indian companies must be mindful of government regulations pertaining to product and consumer safety in all target markets.
So, the chances of a product failing the ever-increasing strict protocols are extremely high.
Product recalls can really impact the finances of a business. Expenses of a product recall begin to mount, starting with costs associated with pulling the identified product off shelves and from transit. In many cases, products must be removed, destroyed, disposed of, and then replaced.
The product recall insurance marketplace is very specialized and should be approached in a well-thought-out manner. At Unison, we have an experienced team who can ensure proper risk management and mitigation procedures and address both first- and third-party exposures should a product recall occur.