September 15, 2017 by Cameron Brady, Assistant Vice President, Product Recall Underwriting, Chubb
Threats of a product recall can significantly disrupt a business. Consider the food manufacturer that must pull produce from thousands of grocery stores across the country after individuals fall ill or need to be sent to hospital as a result of food poisoning, or the component parts manufacturer that discovers a mechanism is causing electrical failures, putting people at risk for deadly accidents.
These are just two of countless examples that illustrate recalls can be a complex and expensive business. A recall event can be debilitating to a manufacturing customer’s bottom line or even put the company at risk for going out of business.
That being the case, brokers should talk to their manufacturing customers about the risks associated with product recalls and the importance of managing their particular supply chain, having a product recall plan in place and purchasing product recall coverage.
Product recall coverage, for example, provides balance sheet protection. It is first-party coverage to reimburse the insured for financial loss because of the recall, and to mitigate reputational damage and loss of brand equity.
Read the full article in the Digital Edition of the August 2017 Canadian Underwriter.
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Cameron Brady, Assistant Vice President, Product Recall Underwriting, Chubb
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