Product Recall Insurance is one of the most important insurance policies that companies who put products into the global stream of commerce should purchase.
While most large organizations purchase the insurance, many other businesses do not. The risk of a product recall has increased exponentially. Stricter global regulatory standards have increased in number, and new product safety rules are continuously implemented. These are positive developments, but for companies, these changes produce more stringent product quality obligations. Maintaining these commitments is not easy when supply chains are geographically widespread, and manufacturing protocols and standards are not synchronized on a global basis. Human error being what it is, mistakes inevitably will occur. With the recognition of the catastrophic financial impact that can be incurred with a product recall, preplanning for recall events and addressing risk transfer capabilities through product recall insurance are now being viewed in a similar light as workplace safety programs, business continuity practices, and product safety protocols (with each such program having been developed to mitigate loss and ultimately protect the integrity of the business).
Source: Chubb, “Chubb Product Recall Insurance Brochure” https://www.chubb.com website. Accessed August 22, 2021. https://www.chubb.com/content/dam/chubb-sites/chubb-com/us-en/business-insurance/product-recall/Product_Recall_Insurance_Brochure_07-21_ADA.pdf
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