Product Recall Insurance

What Does Product Recall Insurance Mean?

Product recall insurance is a policy that helps a company recover financial losses incurred when a product is recalled from consumers or sellers due to a defect or safety concerns, such as the potential to cause injury or property damage.

Insuranceopedia Explains Product Recall Insurance

Despite the safety standards and quality controls governing manufacturing, some commercial products are still recalled due to potential dangers to consumers. News reports often highlight issues such as contaminated food or beverages, toys that pose risks, or technological gadgets that become combustible, much to the detriment of their manufacturers.

A product recall can be not only financially devastating but also damaging to the brand’s reputation. Manufacturers are therefore encouraged to purchase product recall insurance to protect against the losses incurred when their products are recalled or banned from the market.

Product recall insurance also covers bodily injury or property damage experienced by third parties as a result of the defective product.