Recall of Contaminated Products

With tightening regulations and increased consumer protection, manufacturers and retailers are becoming more exposed to the possibility of having to recall one or more of their products.  A botched or mishandled recall can cause incalculable brand damage.

Policies can be tailored to suit an insured’s specific requirements and can incorporate any or all of the following insured events:

• Accidental Contamination
• Malicious Product Tampering
• Product Extortion Demand
• Reputational Harm through Adverse Media Publicity after a Product Recall

Target Industries

Paragon has extensive experience in the development of insurance and crisis management solutions for some of the best-known global brand names with distribution and sales in excess of US$20bn.  Our primary client industries are:

• Food and Beverage:
  • Cereal/bakery – excluding genetically modified products
  • Confectionary/snack foods
  • Seafood
  • Dairy
  • Meat and Poultry
  • Drinks – both manufacturers and bottlers
  • Fruit and vegetables
  • Sauces and condiments
    
• Domestic pet food (agricultural animal feed is considered on a case-by-case basis)
• Pharmaceuticals and nutraceuticals
• Cosmetics
• Other pre-packaged shop-sold goods

Covered Losses

Product recall insurance covers far more than the physical cost of removing products from the shelves and returning them to the point of origin.  The most significant costs to a company normally stem from consequential losses and Recall of Contaminated Products policies are designed to reimburse an insured for the following:

• Pre-recall expenses, for example:
  • Costs and fees of experts and advisors
  • Costs and fees that have been incurred in identifying a recall
• Actual recall expenses, specifically:
  • Transportation costs
  • Destruction/re-working of product(s)
  • Additional staff costs
• Customer recall expenses
• Insured’s loss of gross profit
• Product rehabilitation expenses
• Increased cost of working
• Slotting fees
• Crisis consultants’ fees and expenses