Product Recall Insurance

Product Recall for Manufacturers

A recall is one of the most expensive events a manufacturer can face — and one of the most commonly uninsured. Product liability pays for *third-party injury claims*, but it does not pay the direct cost of getting the product off the shelves. Product recall insurance is the coverage that does.

What Recall Coverage Pays

• Notification costs: Alerting customers, retailers, distributors, and regulators
• Retrieval and shipping: Getting the product back from the field
• Disposal or destruction: Safely scrapping the recalled product
• Replacement or rework: Repairing or replacing affected units
• Lost gross profit: Income lost from the disruption
• Crisis consulting: PR and recall-management expertise

Why GL and Product Liability Won't Respond

Your liability policies cover claims that the product *injured someone*. They exclude the cost to *withdraw the product* — the logistics, the destroyed inventory, the lost sales. Without dedicated recall coverage, those costs come straight out of your balance sheet.

Regulatory Exposure

Depending on your product, a recall may involve the CPSC (consumer products), FDA (food, drugs, cosmetics, devices), NHTSA (auto), or USDA. Regulatory-mandated recalls move fast and carry penalties. Recall coverage helps you respond on the required timeline without a cash crisis.

Recall Planning Lowers Your Risk

Carriers reward manufacturers with a written recall plan: lot/batch traceability, a recall committee, mock-recall drills, and clear regulator-contact procedures. A strong plan speeds the response and improves your terms.

Pairs With Product Liability

Think of product liability as covering the *injury claim* and recall as covering the *withdrawal cost*. A serious defect can trigger both at once — manufacturers need the pair.