Expert Tips: Are You Prepared for a Product Recall?

Posted October 19, 2017 Expert Tips, Commercial Lines
bar manufacturing line

Your organic vegetable snack bar has been selling like crazy. I’m talking hockey stick growth year after year. It is a top retailer seller nationwide and it was picked by two magazines as their favorite food product of the year. Your business has grown from a promising startup to become one of the nation’s premier brands in the health food space with over 250 employees.

It’s a normal production day at the facility, until you receive that call from quality control; they have found traces of Listeria in your production run. After a thorough investigation, it was determined that imported raw carrots are the culprit. The Listeria came from the line that processed the carrots and somehow it migrated to the finished bars before packaging. The Listeria has potentially impacted 2,000,000 bars. This is a crisis! What do you do?

We often hear of situations where business grew rapidly and management had no time to determine adequate insurance coverage in great detail. Most have had the same carrier and broker for several years and feel comfortable in the relationship. Say, for our example above, that a broker has sold you a general liability policy with a product withdrawal endorsement with $500,000 in coverage. This coverage is designed to only cover you for the expenses you incur to pull the product from market. While this will certainly be expensive to pull the product from market, won’t there also be several other things impacted by the recall?

You bet! A standalone product recall program should have been created specifically for this business. This program would have been structured to provide a comprehensive policy to cover not only the cost to withdraw the product, but to really protect the business and, potentially, the customers as well.

When working with the product recall experts at Henderson Brothers, we will help you analyze your business exposures and create a customized product recall program that includes the following features:

  • Crisis Response Team on Call 24/7
  • Contamination Coverage
  • Malicious Tampering Coverage
  • Public Relations Costs
  • Government Recall Coverage
  • Rehabilitation & Marketing
  • Loss of Profit
  • Third Party Recall Damages

Your dedicated Henderson Brothers Representative is available to answer your questions. If you are a new customer, we are ready to perform a comprehensive review of your business exposures.


coast card ship

Please note that the information contained in this posting is designed to provide authoritative and accurate information, in regard to the subject matter covered. However, it is not provided as legal or tax advice and no representation is made as to the sufficiency for your specific company’s needs. This post should be reviewed by your legal counsel or tax consultant before use.