Every now and then there are news reports about a manufacturer recalling its products due to either some safety issues or even when product is otherwise defective in some way. Quite a few companies specially those dealing with consumer products have had to recall products. When it happens, there are numerous direct costs associated with such recalls that could be devastating for a business’ cash flows and profitability. In addition, there may be third party obligations if a product has caused damage or even injury to individuals / businesses / government entities.
Product Recall insurance could provide protection against these direct and liability exposures. We could guide you about the right type of triggers such as whether policy wordings are such that cover is triggered only by actual damage due to a defective product or could be triggered if only the potential of injury / damage becomes known. Obviously, the latter is broader cover.