Romaine Lettuce E. Coli Scare Latest Case Driving Product Recall Insurance Interest

Romaine lettuce, airbags, mobile phone batteries – these are just a few of the prominent product recalls that have occurred in recent years, driving businesses to become more prepared for the financial and reputational risks associated with defective, mislabeled, or otherwise problematic products.

Heightened attention from consumer groups and federal regulators mean information about product recalls spreads more quickly and authorities become involved in detecting problems sooner. The spike in product recalls also means that more businesses, particularly in the food and beverage industry, are looking for insurance solutions.

Erin Ayers, Romaine lettuce E. coli scare latest case driving product recall insurance interest (May 14, 2018).

This story in an excerpt of the original. The content originally appeared in Advisen Professional Front Page News.

Product Recalls Can Be Costly, But Many Businesses Do Not Buy Coverage

From vehicles to mobile phones to nut butter, product recalls have the potential to seriously affect businesses’ bottom lines, but many organizations don’t realize the need for product recall insurance, according to Florian Beerli, senior vice president at Chubb.

“There’s a lack of education and understanding of what the coverage does cover,” Beerli said in a recent interview with Advisen. Some manufacturers may feel they have coverage for costs related to recalling and replacing products along with financial loss through their product liability coverage. This common mistake leaves businesses open to increased risk, according to Beerli.

“They underestimate the cost,” he said. “A recall can put a company out of business. It becomes a risk management tool.”

Erin Ayers, Product recalls can be costly, but many businesses do not buy coverage (April 10, 2017), available with subscription at Advisen Professional Front Page News.

Number of Product Recalls Has More Than Doubled Over 10-Year Period

Advisen, the leading provider of data, media, and technology solutions for the commercial property and casualty insurance market, today announced the release of a paper that discusses the economic impacts of product recalls and the importance of having recall insurance.

The paper highlights:

• the increasing trend of product recalls from 2005 – 2014

• probability of experiencing a recall of a certain size

• industry composition by type of recall for consumer products, foods/beverages/drugs, and agricultural/environmental

• actual case studies of product recalls

The number of product recalls among food and non-food manufacturers has increased significantly.

Read more at http://bit.ly/2agSb4K

Advisen Ltd. (2016). Number of product recalls has more than doubled over 10-year period [White paper]. Retrieved from http://www.advisenltd.com/2016/07/20/product-recalls-doubled-in-10-years/

Product Recalls Impact on Business Financial Health

June 2016

In the past decade, the number of product recalls among food and non-food manufacturers has increased significantly. Advisen wrote a white paper that discusses the economic impacts of product recalls and the importance of having recall insurance. Sponsored by Allied World, the free, 5-page paper presents a number of case studies illustrating how product recalls can affect the financial health of businesses.

Minimizing the Impact of a Product Recall

Between 2010 and 2011, an applesauce manufacturer lost $21 million in direct costs associated with a product recall and the subsequent interruption of its business.

Read more and download the white paper at http://www.advisenltd.com/2016/05/26/product-recalls-impact-on-business-financial-health/