Product recall insurance is a logical and high value enhancement to general liability filling in critical financial gaps left by standard coverage placements.
To meet the contractual requirements of those you are privileged to serve in the supply chain, adequate general liability coverage is a standard requirement. General Liability coverage is designed and intended to respond to third-party bodily injury or property damage claims, if the policy definition of an occurrence is met. This is essential to clarify, because it is one of the distinct differences versus Product Recall coverage. An “occurrence” is defined as: “An accident, including continuous or repeated exposure to substantially the same general harmful conditions.” Bottom line is that this definition will act as a gatekeeper determining if a foodborne event triggers the coverage.
Unlike the general liability response burdens, a product recall policy may define an occurrence as an “accidential contamination” meaning: “Any accidental or unintentional contamination, impairment of your product(s) where consumption has resulted in or would result in bodily injury.” Third Party Recall may also be included that does not have to directly involve your own commodities to trigger a coverage response. Some additional highlights and distinctions of Product Recall Insurance include:
- Adverse Publicity responds to an “alleged” event
- Collateral Damage responds to a product refusal
- Extra Expense protection over normal operating costs
- Government Recall if ordered or “recommended”
- Loss of Gross Profit protection up to 18 months
Input costs continue to impose burdens on operating margins. We are not naive to these burdens, but Product Recall policies are often economically feasible. Engaging experts in Agribusiness is essential that have a keen eye not just on keeping you compliant, but protecting what truly matters for this generation and the next.
