At this time, with the COVID-19, while people are encouraged to exercise social distancing, more and more people shop online, and more sellers go online to sell their products, from masks and sanitizers to pretty much everything else you can imagine. To protect your business and operations, Product Liability Insurance is a MUST HAVE essential coverage. With this post on… Read More »Can I cancel my product liability insurance at any time?
In December of 2016, a furniture chain agreed to pay $50 million to settle a lawsuit after its dressers tipped and fatally injured small children. All product manufacturers, designers, and retailers are exposed to a multitude of risks that can end in litigation. With manufacturing and retail contributing $3.8 trillion to the U.S. economy, there is a vast need for… Read More »Products Liability Coverage from Paperless Insurance
Licensed attorney and insurance broker Diana Motseniat talks about the product recall insurance. We offer Product Recall coverage in multiple states of the USA. To get a quote complete this application: https://www.paperless-insurance.com/insurance-application/product_recall_insurance_application.pdf Learn more about Product Recall: https://www.paperless-insurance.com/product-recall-insurance-explained/ [tvideo type=”youtube” clip_id=”5LTC5UdYQe0″]
[highlight type=”light”]The following is a theoretical scenario.[/highlight]
USA Sugar is a processor of sugar. They bring refined sugar into their production plant, where it is transformed into a liquid form and sent to USA Sugar’s customers, who use the liquefied sugar in various food manufacturing applications.
On May 15, 2015 the FDA contacts USA Sugar and notifies them that salmonella was found in beverage products manufactured by two separate companies. Both strains of salmonella have been traced back to USA Sugar’s liquid sugar product. After a series of tests, it is determined that the liquid sugar was in fact the source of the salmonella. It was also determined that the salmonella contamination occurred in the insured’s facility between March 3 and March 17, which was a period of roughly two weeks. On March 17, all production lines were broken down and a thorough cleaning was performed. The products manufactured after the March 17 cleaning appear to be free of salmonella.
As a result of the findings, USA Sugar decides to perform a voluntary recall of all products manufactured between March 3 and March 17. In addition to USA Sugar’s recall, all products containing USA Sugar’s contaminated liquid sugar will need to be recalled. The FDA classifies all related recalls as Class I, meaning consumption could result in serious health problems or death.Read More »Ingredient Manufacturers and Their Product Recall Risk
If Product Recall Insurance is something you have not heard of before, here is a good example for you. Play-Doh Penis is something that was in one of the Play-Doh sets by Hasbro sold for Christmas this year. It wasn’t a penis really, but rather a play-doh dispenser, but it was in a form of a penis. Many kids got… Read More »Play-Doh Sold Your Child a Toy Penis
If your product is decorated with swastikas, will it be covered? This is a good question for a product liability carrier that provides coverage to Hallmark. http://nypost.com/2014/12/09/hallmark-pulls-hanukkah-wrapping-paper-covered-in-swastika/ Every holiday season, there is at least one store that beats it all with the most “innovative” product of all. This year, the “Grammy” goes to the Hallmark store. They have managed to… Read More »Hallmark pulls Hanukkah wrapping paper covered in swastikas
What is the one thing you expect to see the least in a restaurant? A flying drone! But not in NYC. A drone was flying in TGI Friday’s restaurant last week and cut someone’s face open. Was it a simple accident or product failure? If product failure, is there a product liability insurance in place? Sure many insurance companies provide… Read More »Product Liability Insurance for UAV (drone)
As you have probably heard Zara was “caught” selling Holocaust-Inspired Striped T-Shirts. This is not the first time Zara has came up with a “designer” product like that. Of course, Zara has apologized and quickly recalled the products.
Too bad for Zara, because as with any product recall, there is a huge cost $$$$ to recall the products from the shelves.
Most likely they have a Product Recall Insurance in place which has saved them.. but what if they wouldn’t have it?Read More »Zara Paid $$$$ to Recall its Holocaust-Inspired Striped T-Shirts
Product Recall Insurance Explained
Product Recall History and Overview
The coverage has been around since the 80’s of XX’s Century. The first type of product recall insurance was called malicious product tampering, which only responded to malicious incidents. The limits were $3 million, with six-figure premiums. That’s the way it was for a couple of years. Slowly the book of business grew which allowed larger capacity and to sell higher limits of insurance as well as to expand the coverage. Because it’s catastrophic insurance in nature, when losses occurred, they are generally major. Businesses are not concerned with the smaller losses they can handle financially in-house. What they are looking for is protection from the large losses. So today, it’s financially plausible for small companies as well. When coverage first came out, because of the price tags and the minimum deductibles required, it was accessible only to large, multinational food companies. But now almost every insurer has a strategy to go after smaller businesses. Products Recall is designed to help the insurance manage the crisis of such an occurrence and help protect against product degradation and third party lawsuits.
Most Commercial General Liability policies do not provide coverage for the cost to recall products. Stand alone Product Recall insurance fills this gap because it provides coverage to the cost to recall, withdraw and dispose of the insured’s products and it also can cover loss of income and the extra expenses incurred when a product has to be withdrawn from the marketplace.
Recalls can happen because of mislabeling, malicious tampering, accidental contamination or for a variety of other reasons. Now due to new legislation. the FDA can mandate insured’s conduct recalls in some cases.
Products Recall offers insurance protection in the event of a recall of an insured’s product. This protection includes coverage for the insured’s product recall expenses and liability to third parties kidnapping; bodily injury extortion; property extortion; product contamination extortion; trade secret/computer virus extortion; wrongful detention and hijacking.
Endorsements available to extend coverage include:
Most manufacturers, importers and wholesalers we deal on a regular bases avoid adding product recall coverage to the list of their insurance policies. Unless the destiny makes you deal with it, unlikely one knows that the expenses for the product recall are inclusive of notification, inspection, retrieval, transportation, utilization/salvaging, compensation to injured/damaged parties, as well as good name restoration. For example, more than 90 tons of ready-to-eat salads and sandwiches by a California catering company are being recalled after 26 people in three states were sickened by a bacterial strain of E. coli linked to its products, federal health officials said on 11/10/2013.
Richmond-based Glass Onion Catering are recalling approximately 181,620 pounds of salads and sandwich wraps containing cooked chicken and ham, the USDA’s Food Safety and Inspection Service said. It’s unknown how much exactly the product recall is going to cost. Read More »Product Recall Insurance for Prepackaged Salad