Dietary Supplement and Nutraceutical Industry Insurance

Providing low Product Liability Insurance premiums for manufacturers, importers/exporters and distributors of Dietary Supplements and Nutraceuticals

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 Product liability and dietary supplements

Insurance Coverage Highlights

  • Up to $5,000,000 liability limits available on a primary basis
  • Worldwide Coverage Available
  • Hired & Non-Owned Auto Liability
  • Product Withdrawal Expense sublimity of $100,000 Available
  • Excess Liability Limits up to $5,000,000
  • Vendors Additional Insured Endorsement Included
  • Landlord, Sponsors or Lessors Additional Insured Endorsement Included
  • Waiver of Subrogation Endorsement Available
  • Primary & Non-Contributory Endorsement Available
  • Wide Range of Deductibles Available

Issues that affect the dietary supplement Industry

Overall, the dietary supplement industry has improved its safety track record significantly over te past ten years and, as a result is seeing record low minimum premiums for Product Liability Insurance. However the dietary supplement and natural products industry is still plagued by poor manufacturing and inspection practices that continue to be of concern to General Liability Insurance caries

Violation of Manufacturing rules

Recent reports from the FDA’s Division of Dietary Supplement Program reveal that half of the 450 dietary supplement firms inspected had violations of manufacturing rules. Reports reveal struggles with the most basic of manufacturing standard,s such as verifying the ingredients that go into products, inspection of finished batches and unsanitary factories. Some of the inspected factories did not even have master manufacturing records or recipes for the products they were manufacturing.

Possible undeclared substances in products

Commissioned studies by Informed Choice revealed that approximately 25 percent of supplements in the market could have undeclared substances in their products. In other words, there are ingredients in the supplements that are not listed on the product labels.

How to avoid these risks

It is highly recommended that because of poor domestic and foreign manufacturing process and the one-in-four chance that a dietary supplement contains a foreign substance not listed on the label of ingredients,  businesses in the dietary supplement and nutraceutical industry consider product recall insurance or purchasing a Product Liability Insurance policy that includes product recall limits. Many of the General Liability insurance companies that specialize in the Dietary supplement and nutraceutical industry are now offering coverage sub-limits up to $100,000 for potential product recalls.

Many start-up dietary supplement businesses mistakenly assume that Product Liability Insurance provides product recall coverage. However, only Product Recall insurance provides the necessary coverage for notifying clients of a recall, shipping cost and expense to pull products from the shelves, warehouse and storage expense and the extra cost of personnel required to conduct the recall.

7 things you should know about the FDA and dietary supplements

  1. A dietary supplement is a product that is ingested and may include herbs, minerals, vitamins, amino acids, botanicals, enzymes, organ tissues, metabolites and glandular.  The Dietary Supplement Health and Education Act of 1994 requires every supplement be labeled a dietary supplement. Supplements may come in tablets, capsules, powders, bars, gel caps or liquids.
  2. You are not required to register your products with the FDA or get approval from the FDA before producing and selling your products.
  3. All companies that manufacture, package, label or hold dietary supplements must comply with current dietary supplement Current Good Manufacturing Practices for quality control.
  4. When a manufacturer, packer or distributor of dietary supplements is notified of an adverse effect involving their dietary supplement, it their responsibility to submit an adverse event report to FDA.
  5. Product information such as product claims, labeling, packaging inserts and accompanying literature all fall within the FDA’s jurisdiction.
  6. The FDA does not allow dietary supplements to promote on labels or in labeling that  the product is a cure or treatment for a specific disease. If any such claims are made, the FDA specifically considers the supplement to be an unapproved and illegal drug. In fact, the Dietary Supplement Health and Education Act of 1994, specifically requires supplement labels to include a disclaimer that states that the product is not intended to “diagnose, treat, cure or prevent any disease” because only drugs are legally allowed to make this claim.
  7. A manufacturer, distributor or importer that intends to market any dietary supplement that contains a “new dietary ingredient” is required to notify the FDA and must demonstrate to the FDA the ingredient is safe for use. The responsibility of determining if a dietary ingredient is “new” is solely the responsibility of the manufacturers, importers and distributors.

Product Liability Insurance Concerns for Dietary Supplements and Nutraceuticals

1. Dietary Supplements Liability Protection

  • Vitamins & Minerals Coverage
    • Multivitamins Protection: Coverage for manufacturers of multivitamin products that provide a blend of essential nutrients.
      Risk management issue: Mislabeling or incorrect dosages can lead to health complications, resulting in claims and potential liabilities.
    • Single-Nutrient Supplements Policy: Protection for producers of specific vitamin or mineral supplements like Vitamin D, calcium, or iron.
      Liability exposure: Overconsumption or drug interactions may result in health risks, leading to potential indemnity claims.
  • Herbal Supplements Risk Management
    • Botanical Extracts Coverage: Policies designed to cover manufacturers of supplements made from plant-based ingredients, like ginkgo biloba or echinacea.
      Liability exposure: Contamination or adverse interactions with medications may lead to allergic reactions and consumer claims.
    • Traditional Medicine Supplements Protection: Coverage for supplements based on traditional healing systems like Ayurveda.
      Risk concern: Inconsistent product potency could lead to unexpected side effects, increasing the likelihood of claims.
  • Protein Supplements Liability Coverage
    • Whey Protein Protection: Risk coverage for producers of whey protein supplements.
      Liability exposure: Allergic reactions due to contamination or improper allergen labeling can lead to significant liability.
    • Plant-Based Proteins Policy: Indemnity for manufacturers of plant-based protein supplements, such as those derived from peas or hemp.
      Liability risk: Contamination with harmful substances, such as heavy metals or pesticides, poses potential legal exposure.
  • Probiotics Coverage
    • Live Bacteria & Yeast Supplements Protection: Coverage for probiotic products promoting gut health by introducing beneficial bacteria.
      Risk exposure: Improper storage or production may cause infections, especially in immunocompromised individuals, leading to claims.
    • Prebiotic Supplements Policy: Risk management for prebiotic supplements that nourish gut bacteria.
      Liability concern: Digestive side effects or interaction with medications could trigger product liability claims.

2. Functional Foods Coverage

  • Fortified Foods Liability Protection
    • Omega-3 Enriched Foods Policy: Protection for manufacturers of foods fortified with omega-3 fatty acids, such as enriched eggs or bread.
      Liability exposure: Misleading health claims or contamination issues can result in liability claims and financial risk.
    • Calcium-Fortified Juices Coverage: Risk management for producers of juices fortified with calcium to promote bone health.
      Risk concern: Overconsumption could lead to health problems like hypercalcemia, raising the potential for claims.
  • Energy Bars Protection
    • Protein Bars Liability Protection: Coverage for manufacturers of protein bars marketed to athletes and fitness enthusiasts.
      Liability exposure: Contamination or mislabeling of banned substances could result in product liability claims.
    • Meal Replacement Bars Policy: Risk coverage for manufacturers of meal replacement bars enriched with essential vitamins and minerals.
      Indemnity concern: Inaccurate labeling or failure to meet regulatory standards can lead to product claims.

3. Weight Management Products Risk Management

  • Appetite Suppressants Coverage
    • Natural Appetite Suppressants Protection: Coverage for manufacturers of products containing ingredients like green tea extract to curb hunger.
      Liability concern: False advertising or side effects such as increased heart rate could lead to consumer dissatisfaction and claims.
    • Meal Replacement Shakes Policy: Protection for producers of meal replacement shakes marketed for weight control.
      Risk management issue: Mislabeling of calorie or nutrient content could lead to malnutrition, increasing liability exposure.
  • Fat Burners Protection
    • Thermogenic Supplements Coverage: Liability protection for manufacturers of products that claim to burn fat by increasing metabolism.
      Risk concern: Stimulant-based ingredients can lead to cardiovascular issues, raising the potential for consumer claims.
    • Carb Blockers Risk Management: Indemnity for producers of supplements designed to block carbohydrate absorption.
      Liability exposure: Gastrointestinal distress or adverse interactions with medications can lead to legal claims.

4. Anti-Aging Supplements Protection

  • Antioxidants Coverage
    • Resveratrol Supplements Policy: Coverage for manufacturers of resveratrol supplements, promoted for their anti-aging properties.
      Liability concern: Misleading claims or contamination can result in significant liability exposure.
    • Coenzyme Q10 (CoQ10) Coverage: Risk protection for manufacturers of CoQ10 supplements marketed for heart health and anti-aging.
      Risk management issue: Inconsistent dosage or adverse interactions with medications could lead to claims and financial exposure.
  • Collagen Supplements Liability Coverage
    • Hydrolyzed Collagen Protection: Coverage for manufacturers of collagen supplements designed to improve skin elasticity and joint health.
      Liability risk: Allergen exposure, particularly for individuals allergic to bovine or marine collagen sources, may result in product liability claims

5. Cognitive Health Supplements Risk Management

  • Nootropics Protection
    • Memory Enhancement Supplements Coverage: Liability protection for manufacturers of supplements that claim to boost memory and cognitive function.
      Risk concern: Products containing stimulants may cause anxiety or cardiovascular issues, leading to legal exposure.
    • Focus & Clarity Supplements Policy: Coverage for manufacturers of products aimed at enhancing mental clarity and focus.
      Liability exposure: Unsubstantiated health claims or interactions with medications could trigger product liability claims.

6. Immune System Support Protection

  • Immune Boosters Liability Coverage
    • Elderberry Supplements Policy: Risk protection for manufacturers of elderberry supplements marketed for immune support during cold and flu season.
      Liability risk: Contamination or adverse side effects could lead to significant claims.
    • Zinc Supplements Coverage: Protection for producers of zinc supplements marketed to enhance immune function.
      Liability concern: Overconsumption of zinc may lead to nausea or copper deficiency, increasing the risk of product liability.

7. Sports Nutrition Coverage

  • Pre-Workout Supplements Protection
    • Stimulant-Based Pre-Workouts Coverage: Liability protection for manufacturers of stimulant-based pre-workout products designed to boost energy.
      Risk concern: Overstimulation or contamination with banned substances could lead to heart issues and legal exposure.
    • Non-Stimulant Pre-Workouts Policy: Protection for products that enhance endurance and hydration without the use of stimulants.
      Liability exposure: Mislabeling or contamination could result in product liability claims.
  • Post-Workout Recovery Coverage
    • Branched-Chain Amino Acids (BCAAs) Protection: Coverage for supplements aimed at promoting muscle recovery and reducing fatigue.
      Liability risk: Incorrect dosage or interactions with other medications can trigger consumer claims.
    • Glutamine Supplements Liability Coverage: Protection for manufacturers of glutamine supplements, used to support muscle recovery and immune function.
      Risk management issue: Contamination or inconsistent purity levels could lead to product liability claims

8. Sexual Health Supplements Protection

  • Male Enhancement Supplements Coverage
    • Libido-Boosting Products Protection: Risk coverage for manufacturers of supplements aimed at enhancing male libido, often containing herbal ingredients.
      Liability exposure: Unproven claims or hormonal imbalances could lead to dissatisfaction and claims.
    • Erectile Dysfunction Supplements Policy: Protection for manufacturers of supplements aimed at improving erectile function.
      Risk concern: Adverse cardiovascular effects or interactions with prescription medications may result in significant liability claims.
  • Female Sexual Health Supplements Protection
    • Libido Enhancers for Women Coverage: Coverage for products targeting female libido enhancement, often containing natural ingredients.
      Liability exposure: Hormonal interactions or misleading efficacy claims could result in product liability claims.
    • Hormonal Balance Supplements Risk Management: Indemnity for manufacturers of products designed to regulate hormonal function.
      Risk concern: Side effects, particularly for women on hormone therapy or birth control, may lead to claims and financial exposure.

Are you looking for an insurance specialist that understands the dietary supplements insurance industry? Call Pall Owens for a quick evaluation and quote for your products.