Unfortunately, some clients learn about Product Recall Insurance the hard way. Despite their insistence on the potential for limited impact and a credible track record of product safety and reliability, many are caught when the scale of the issue is beyond anything thought plausible. Product recalls can take many forms and even where no fault is apparent, clients may still be impacted through a wider forced product recall at institutional level to protect public health. Recalls for both new and established products occur all too often, and they can have serious repercussions. In some cases, they have destroyed brands and even companies.
Why aren’t more companies prepared to deal with recalls?
In part, it’s because they don’t recognise how great an impact a recall can have on an organization’s reputation and balance sheet. What’s needed is a strategy that cuts across the company, addressing the implications of a recall for all relevant business functions. LHK Insurance brokers have studied how companies in Ireland have handled a recall, and we can either arrange for appropriate risk transfer via (product recall insurance) to the insurance market or create a framework to help managers assess their current product recall strategy and design a plan tailored to their company’s needs.
If product recalls are handled properly, not only can you keep damage to a minimum but also find opportunities to reap unexpected benefits. A company’s success depends on building long-term relationships with customers and anything that could jeopardise those relationships—such as a product recall—would have to be dealt with quickly and effectively. A solid strategic product recall plan will ensure a company will emerge stronger. A product recall can be a costly distraction from normal business routines caused by a failure in internal development and operating processes. Every effort must be made to avoid product recall situations by continually elevating quality standards as anything less could jeopardise your brand by unacceptably putting one of your key strategic assets at risk.
What is product recall insurance ?
Product recall is more frequently associated with the food and beverage industries, however a recall can hit any manufacturer or distributor regardless of industry sector. Product recall insurance helps provide financial protection in the event that one of more of your products caused injury or other damages to a third party.
Product recalls can be costly and complex, as well as damaging to a company’s reputation. Product recall insurance can help cover the operational costs of a recall as well as the costs of re-establishing your company’s brand.
What are the typical recall costs?
- Advertising costs to advise of the recall
- Shipping costs to collect the recalled products
- Product disposal costs
- Product replacement, repair and distribution costs
- Business interruption costs
- Reputational repair costs
Any business involved in the manufacture, distribution, or supply of consumer products should consider obtaining a quote for product recall insurance. Despite a credible history of product safety, claims may arise unexpectedly. The LHK Insurance broker team can help you effectively manage the liabilities associated with product recall.
In addition to Product Recall Insurance, our experienced team of insurance brokers can arrange cover for you across the following products for you or your business.
We have Home insurance, Car insurance, Gadget insurance, Travel Insurance, Marine insurance, Personal accident insurance, Self-build insurance, Commercial legal expenses, Commercial liability insurance, Commercial motor insurance, Commercial property insurance, Contractors all risk insurance, Credit insurance, Cyber insurance, Directors and officers insurance, Engineering insurance, Farm insurance, Group personal accident insurance, Marine cargo/ goods in transit insurance, Motor fleet insurance, Motor traders insurance, Office insurance, Professional indemnity insurance, Shop and retail insurance and Special types vehicles insurance.