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Dietary Supplement and Nutraceutical Industry Insurance

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

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.

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.