According to the FDA, nearly 30 product recalls occur every week in the U.S. on average. Recalling, replacing or destroying a consumer product can incur substantial long-term reputational and financial costs for your business. Not only that, news of a product recall spreads like wildfire on social media, so having a product recall policy with the features and endorsements necessary to protect your business is vital to staying ahead of the competition.
Product recalls are only one component of a product contamination event.
- A product contamination may affect a large volume of stock leaving a company unable to meet demand.
- Decontamination of manufacturing equipment may result in partial or complete shutdown.
- Government agencies may require closure of a plant until safe manufacturing conditions are restored.
- Loss of sales, due to loss of contract or confidence in a product, following a contamination event can damage your brand.
- Property Damage
- typically applies if the contaminated product becomes an ingredient of another product.
- Bodily Injury liability resulting from the bodily injury caused by the contaminated product to consumers.
- Contaminated product that must be recalled and/or destroyed.
- Expenses you will incur to trace, identify and withdraw contaminated product
- Depending on the type of product, extent of distribution and nature of contamination, destruction costs can be expensive.
- Companies may employ recall or crisis management consultants to access specific skill sets, minimize disruption of the business and contain brand damage.
© Copyright 2021. All rights reserved. This content is strictly for informational purposes and although experts have prepared it, the reader should not substitute this information for professional insurance advice. If you have any questions, please consult your insurance professional before acting on any information presented. Read more.
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