A Product Recall is the act of removing a batch or production run of products from the marketplace. The trigger to activate Product Recall Insurance is when the products in question pose an imminent threat of bodily injury or property damage. Sadler Product Liability Insurance specializes in helping businesses with unique and high hazard products secure Product Liability Insurance and Product Recall Insurance from the top national “A” rated carriers in the country. We are licensed to do business in all 50 states. The tougher the risk the more we like it.
What Is Covered Under Part One (Direct Expense or First Party Expense)
What Is Covered Under Part Two (Third-Party Expense)
The only time you will not need Thirty Party Coverage is when you sell products under your own label or a third party is not involved.
Product Recall Insurance provides protection in the event any of your products pose an imminent threat of bodily injury or property damage. It does not provide coverage for defective products that simply do not work and are not a threat to cause bodily injury or property damage. In other words, the trigger for Product Recall Insurance is the same for Product Liability Insurance – bodily injury and property damage. As long as the property damage or bodily injury trigger is met, recalls can be voluntary or involuntary. A voluntary trigger would be your company recognizing one or more of your products could cause bodily injury or property damage and you want to remove the product before it creates a potentially more serious product liability claim. An involuntary claim is typically imposed by a government agency such as the CPSC or a thirdparty such as a retailer or wholesale distributor that sells your products.
More and more specialized General Liability Policies for products such as dietary supplements and cosmetics are providing the opportunity to add a Product Withdrawal Endorsement onto the policy. These endorsements usually provide a small sublimit of coverage, usually $25,000 to $50,000. Coverage is limited to first party and, typically, covers basic expenses such as notifying customers, shipping, warehouse and storage, and costs of hiring extra personnel to conduct the recall. This coverage does not extend to third parties such as manufacturers using your components or for products you make but sold under a third party’s name.
Stand Alone Product Recall Policies provide more options and flexibility to tailor the coverage to your specific needs. Liability limits can range from $250,000 to $5,000,000. Several deductible options are available and using higher deductibles can help lower annual premiums. Also, Third Party Coverage to protect your clients along with Impaired Property, Cost To Refund, Repair or Replace, and Worldwide Coverage Endorsements can be added to your policy as coverage enhancements.