Recall Response Insurance
- Costs to notify customers, ship and dispose of the product
- Expenses associated with extra warehousing and extra personnel to conduct the recall
- Costs of customer refunds, repairs or replacement products
- Third party damages resulting from the recall
Recall Response is an innovative two-part insurance program.
It is designed to provide coverage for the full spectrum of costs that can be associated with a product recall event, including both first-party expenses and third-party liabilities.
The program is designed to respond anytime the use or consumption of the insured’s product results in or threatens to result in bodily injury or property damage. Coverage can also be enhanced to respond when a product causes impaired property to third parties—as is the case when the product is a component part. Government involvement is not a prerequisite for coverage, nor is a formal recall announcement.
Recall Response Coverage A
Part one of Recall Response covers direct expenses an insured incurs due to a recall, including costs related to:
- Customer notification and communication
- Product disposal
- Extra personnel
Recall Response Coverage B
Part two of Recall Response covers third-party compensatory damages the insured must pay as a result of damage caused by the related product. This includes:
- The expense a third party incurs when they need to recall a product that incorporates the insured’s product, including the cost to repair or replace such a product.
- Business interruption losses of others as a result of a recall caused by the insured’s recall product.
- Third party’s brand reputation due to damage caused by the insured’s recalled product.
- Cost a third party incurs to purchase substitute goods to replace the insured product.
Response coverage does not cover bodily injury or property damage that results from products involved in a recall.
Insureds may choose either Coverage A or Coverage B, with separate limits for each, or can combine both coverages in one program with a single limit. A combined single limit is recommended for insureds that face both first- and third-party recall exposures.
HIGH Limits are available, with flexible deductibles/self-insured retentions