Product Recall Insurance - Business and Personal Insurance to Fit Your Needs
What Could Go Wrong?
What are the ways in which your company could be found at fault for damages resulting from the use of your product. You might think that your product—or your role in a product is at little risk of causing damage, but you may be exposed to a range of less visible risks. Consider these factors:
- Product design, manufacturing, assembly distribution and packaging—Although your company’s role in the life of a product may be limited, you may still be liable in a product lawsuit. For instance, you might provide a single small part of a larger product; or your design might be safe, but a contract manufacturer produces a flawed product; or your company simply repackages and distributes products manufactured elsewhere. In all of these instances, your company could be liable—or at least will have to pay to legally defend itself—in the event of a product lawsuit.
- Directions, warnings and flawed marketing—How you communicate about your product can result in product liability risk. For instance, if instructions, warnings or promotions lead to misuse of your product resulting in property damage or injury, your company could be found liable.
- Partner, investor and affiliate relations—Partner or affiliate companies may also require that you have product liability insurance. For instance, a retailer may not sell your product unless you have product liability coverage. Financial backers might also require this coverage before making an investment. Ultimately, failure to carry product liability insurance can result in missed business opportunities.
The recall of a product sets in motion a series of events which may involve significant expense. The expenses begin to mount with the cost of pulling the item out of the stream of commerce. In many cases, products must be removed, destroyed, disposed of, and then replaced. In addition, media relations specialists are often retained in order to communicate the details of the recall to the public as well as lawyers and/or government affairs professionals who interact with the relevant government agency.
Most General Liability policies exclude Product Recall claims due to the Sistership Exclusion clause. The intent of the Sistership exclusion is that while insurance covers damages for bodily injury and property damage caused by the product that was defective or failed, it was never intended that the insurer would be saddled with the cost of preventing such defects or failures any more than it was intended that the insurer would pay the costs of the defect in the first place or preventing the first failure if the product has been discovered to be in a defective or dangerous condition before the occurrence.
Product recall insurance will help you cover a wide range of costs, including:
- Advertising and promotional costs to launch the recall.
- Shipping costs to collect recalled products.
- Product destruction and disposal costs.
- Product replacement, repair and distribution costs.
- Fees to wholesalers, distributors and retailers.
- Business interruption costs.
- Reputation repair and management costs.
Our agency is an industry leader in Product Recall Insurance. We represent many of the largest insurance companies in the country for Product Recall Insurance. We shop all of these companies to you excellent coverage and premiums.
We serve customers in the states of Arizona, California, Colorado, Nevada, Texas, and Utah.