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.
Property Damage
- 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.
Third Party
- 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.
Business Interruption
- 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.