Recall and Contamination Insurance

Why take out Recall and Contamination Insurance?

Manufacturing and trading companies are aware that their goods must be of impeccable quality. Not only are consumers more critical than ever, the government is also setting increasingly high standards in the area of product safety. As a result, particularly in the food and beverage industry and the pharmaceutical and cosmetics sectors, recalls of non-compliant contaminated products are becoming more frequent.

Removing a defective product from the market or from the distribution chain costs a lot of money. In addition to the costs of destroying and replacing the contaminated goods, affected companies often suffer serious losses due to damage to their reputation. Product contamination insurance covers all those financial consequences and additional costs of a recall.

What costs does Recall Insurance cover?

Recall and Contamination Insurance covers all the costs you have to incur to recall an affected product:

• costs of storage and destruction of the contaminated goods,
• costs of replacing and redistributing the contaminated goods,
• the loss of profit that your company will suffer as a result of the recall,
• search and examination costs preceding the recall,
• crisis communication costs,
• (marketing) costs you must incur to restore your image,
• extortion charges,
• compensation for third parties who are also affected by the recall.

What should you be aware of when purchasing Recall and Contamination Insurance?

The classical liability insurances for companies do not always provide cover in the case of a recall or only cover part of the costs. That is why it is important to thoroughly analyse the conditions of your civil liability insurance policies and tailor your recall insurance accordingly. Depending on the situation, you can take out product contamination insurance as a stand-alone policy or as an extension to your Civil Liability After Delivery policy.

In addition, it is certainly useful to determine the cover limits and exemptions in your policy according to your company’s turnover. A correct assessment of your risks is also essential for good protection.