Product Recall Expenses Extension

What is it?

Product Recall Expenses can be an extension on a Public and Products Liability (also known as Broadform or General Liability) policy. Whilst many businesses mitigate their risk in the event a product actually occasions bodily injury or property damage, there can be expensive repercussions for a business in the event that their product is deemed defective or suspected of a defect that may potentially cause bodily injury or property damage.  Such a situation may leave a business with the costly endeavor of notifying affected customers and removing their products from circulation.

Whilst traditional Broadform Liability (General Liability) policies would not trigger to cover the additional expenses to remove a product, a product recall expenses endorsement has the potential to act as a solution to this gap.

It should be noted, that this endorsement is not intended to provide cover for the loss of the product itself or the consequential loss of income as a result of the recall. 

What are some of the costs associated with Product Recall?

• Recall notifications to customers and the public
• Transportation of the insured recalled products
• Additional costs with respect to overtime or hire of personnel to handle and manage the recall
• Costs of temporary storage if needed
• Expenses required for disposal/ destruction of recalled product

Who can benefit?

It must be stressed that this particular endorsement is not a full-blown recall offering and as such the major beneficiaries of such an endorsement are smaller businesses who manufacture or otherwise import products.

Claim Example

Plastic pieces were found in a batch of salad and a subsequent recall was carried out with costs associated with investigating and effecting same being indemnified by this endorsement.

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