What is Product Recall / Product Contamination Insurance?
Product Recall /Contamination insurance provides coverage for liabilities resulting from incidents involving accidental product contamination, malicious contamination, and product extortion. This liability insurance covers the expense of recalling contaminated products, replacing or destroying the contaminated product, rehabilitating the reputation of the insured, loss of gross profits, and the cost of a customer’s expenses if the insured’s product contaminated the customer’s product. Recall/contamination policies are especially beneficial to food and beverage related products although coverage may also be purchased for non- food related products such as pharmaceuticals and auto parts manufacturers.Â Recall/contamination policies vary from company to company and their content should be carefully reviewed.
Coverage is available to protect food and beverage manufacturers, growers, custom food packers, livestock operations, meat packers, canners, medical and pharmaceutical manufacturers, packagers, consumer goods manufacturers and distributors, and custom packagers and labelers.
Why it’s smart to have Product Contamination Professional Liability Insurance
A Southern California firm recalled their chocolate energy drink after it was discovered that a number of canisters did not include “whey caseinate” (a milk ingredient) on the label. The product had been distributed to grocery health food, pharmacy and on-line retailers nationwide. People who are lactose intolerant or have dairy product allergies may develop life threatening allergic reactions. To date, no allergic reactions have been reported.