Jonathan Geissler October 23, 2020 No Comments

Recalls Don’t Have to End Your Business


Product Recall InsuranceA manufacturer’s main focus is to produce quality products that consistently meet or exceed customer expectations.

Unfortunately, even for the very best, things can go wrong, whether it’s a storm delaying delivery, a defect with raw materials, or a manufacturing process breakdown. If the unexpected happens, there are several anticipated and unanticipated costs to bear, from a full product recall to a factory shut down, which could include costly lawsuits or even bankruptcy.

There are many factors to consider when selecting the right insurance coverage for such an event. While certain injuries and damages caused by defective products may be covered by standard general liability policies, they don’t cover expenses related to a recall, leaving a potentially large insurance coverage gap. That’s why it’s vitally important for manufacturers to consider product recall insurance.

Product recall coverage through Seely & Durland Insurance can be added to a commercial package policy to help protect manufacturers from financial disaster as a result of a recall.

  • Product recall expense coverage covers costs of notification, employee expenses, shipping, transportation, disposal of defective products, and product inspection. Coverage reimburses for expenses incurred to remove a defective product from the marketplace for up to one year after a recall.
  • Additional covered expense covers additional expenses such as lost profits from customers, good faith advertising, and repair, replacement, or repurchasing costs, particularly handy for unfinished products.
  • Product recall liability coverage extends liability protection while also covering defense and court costs that may arise from a product recall. What happens if the company with the product recall and its customers can’t agree on how much should be reimbursed for costs and lost profit after the recall? The customers are likely to sue. This type of lawsuit would not be covered by general liability insurance.

A product recall can have devastating effects to a business, its reputation, and financial stability. You’ve worked too hard to lose it all. Contact us at 845-986-1177 to learn more or to receive a free consultation.


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