What is Product Recall Response?
The threat of a product recall is becoming increasingly prevalent for many industries. Whether voluntary or involuntary, a product recall can be very costly – not only to a company’s balance sheet but also to its brand reputation. A product recall can affect all companies involved in the commerce chain, including processors, distributors, and retailers.
AIG’s product recall insurance offers the flexible coverage needed in order to protect a company against this risk. Each policy is tailored specifically for each client based upon individual needs and considerations, including quality control measures, past recall history, packaging processes and current recall protocols.
Why does your business need Product Recall Response?
A few common examples:
- A food processing and packaging company recalls thousands of jars of peanut butter after discovering that moisture caused by faulty sprinklers in the plant led to a salmonella outbreak.
- A manufacturer and supplier of wet pet food must recall 60 million cans after it is revealed that wheat gluten used in their production was tainted with melamine leading to hundreds of reports of pets becoming sick or dying, numerous class action lawsuits, and millions of dollars in lost sales.
What does Product Recall Response cover?
Comprehensive coverage is provided for a product recall that results in, or creates a threat of bodily injury or property damage.
- First-party covered recall expenses include:
- Cost of notifying customers of a recall
- Cost of shipping and disposing of the recalled product
- Extra warehouse expenses
- Costs associated with refunding, repair or replacement and shipment of a new product back to the customer
- Third-party compensatory damages contractually required to pay a distributor or purchaser of a recalled product are also covered
- Third-party covered compensatory damages include:
- Cost of repair of the third-party’s product
- Business interruption caused by the recall
- Damage to the brand reputation of the third-party
- Defence costs incurred as the result of any claims made from the product recall
Additional coverage options available:
- Costs to refund, repair or replace a product
- Impaired property
- Government recall
Target classes of business:
- Ingredient manufacturers and suppliers
- Flavours and fragrance
- Food and beverage manufacturers or distributors
- Meat or seafood processors
- Chemicals (food and cosmetic grade)
- Packaging product manufacturers
- Educational toys
- Consumer product manufacturers
- Children’s product manufacturers
AIG Capacity and Limits:
- Capacity up to $10M for first party recall and third-party recall liability
- Minimum self-insured retention (SIR) of $25K
- Minimum premium of $15K
The AIG Advantage
- Dedicated claims personnel are available from the first notice of loss and can provide global support
- Unwavering capacity is available up to $10 million
- We have strong relationships with exceptional independent adjusters, forensic accountants, and coverage counsel globally to assist with understanding local government product regulations and requirements
- Combines a long-established market commitment, client service, and industry knowledge to address the unique risks of the Canadian food and beverage industry
- Integrates a wealth of historical knowledge and expertise to write consistent high-quality policies responsive to specific client needs
- Provides client coverage on a worldwide basis