Product Recall

If one of your products has a defect, you may have to recall the whole batch.
This can be really expensive!

What is Product Recall Insurance?

When a product is needed to remove itself from public circulation due to it being a danger to society, a product recall insurance can tremendously mitigate the costs associated with a recall. It does not matter if your business is big or small, whether your risk assessment is stringent or weak, or if your product is deemed to have caused or is at risk at causing bodily harm; your products may be need to be recalled. Product recall insurance can minimize the costs associated with the recall and can be bought together with product liability insurance.

What does Product Recall Insurance cover?

Product recall covers the cost related to the process of recalling a product. Generally, these costs and expenses can come in various forms including:

  • Recall costs: The cost incurred in recalling, inspecting and destroying the product, including advertising and labour.
  • Third party recall costs: The cost incurred by a third party whereby the insured product is an ingredient in their product.
  • Consultant costs: The cost incurred by utilizing recall specialist or crisis consultants.
  • Replacement costs: The cost associated with the replacement and redistribution of the affected product.
  • Business interruption: Loss of profits and increase in expenses incurred from potential decline in sales.
  • Rehabilitation expenses: The costs incurred to return sales to levels before recalll, PR and advertising costs for brand promotion.
  • Extortion costs: Ransom, negotiation costs, loan interest, increased security costs.

How important is Product Recall Insurance?

Product recalls can be expensive, time consuming and detrimental to your business or brand. It can affect your market share and reputation immediately and these problems could take years to recover. In today’s age, news spreads fast so it is vital to have protection measures in place in order to soften the blow should any catastrophic event happen.

Who needs Product Recall Insurance?

Product recall insurance is principally designed for product manufacturers. This includes:

  • Any business manufacturing, supplying or distributing products for human ingestion.
  • Manufacturers, producers, suppliers and retailers of foods.
  • Manufacturers, producers, suppliers and retailers of pharmaceuticals, cosmetics.
  • Manufacturers of consumer durables such as toys, whiteware and home appliances.

How much does a Product Recall Insurance policy cost?

Generally, product recall insurance is bought together with product liability. However, should there be any cases for stand-alone product recall policies, then the following factors are used for underwriting:

  • Type of business
  • Product details
  • Estimated revenue for 3 years prior and forthcoming year
  • Details of top product lines
  • Details of biggest deals with suppliers/distributors/retailers/wholesalers
  • Product life expectancy details
  • Quality Assurance and Quality Control plan
  • Recall plan
  • Liability limit
  • Credential certificate (if applicable)


Recalling a product can be stressful as it can be time consuming. But rest assured, at CHAZ, we can ochestrate a plan that can put your mind at ease, whereby coordination with insurers is administered with meticulous detail.

Important Disclosure

The content provided is for informational and educational purposes only. The coverage written may change without notice and may not be applicable to all situations and policies. Terms, conditions and qualifications are also subject to circumstance, supplementary material and underwriting. CHAZ Insurance Brokers Ltd. is not liable for any discrepencies should there be any. For more information, please contact us via the enquiry form below.

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