Product Liability Insurance is a first-party, specialized insurance that protects against tampering, contamination, crisis management expenditures, and recall costs associated with unfavourable publicity associated with a product recall. This coverage may be obtained in addition to general liability or as a stand-alone insurance.
This form of insurance can assist you in managing the negative consequences of a recall and will act as a safety net while you strive to rehabilitate your business’s image and reclaim the public’s confidence and patronage. It’s critical to remember that a recall may occur without the company’s fault.
This sort of insurance is available in two forms: voluntary and involuntary. Numerous corporations have chosen voluntary recalls, which eliminates the need for them to wait for the government to order an obligatory recall. This mitigates the negative consequences of government intervention.
The corporation is voluntarily recalling the product to acknowledge its fault. With involuntary recall, you run the danger of being seen adversely by the public for failing to exercise due diligence or, worse, for concealing the facts.
The cost of this insurance will be determined by numerous criteria, including the following:
Every business that manufactures, packages, or distributes items for wholesale or retail must have a Product Recall Plan in place. It will limit your financial exposure if any of your items need to be recalled. Consider this form of insurance as your first line of defense in the event that one of your goods fails.