Here’s Why Your Business Needs Product Recall Insurance

Heres Why Your Business Needs Product Recall InsuranceThere are thousands upon thousands of product recalls in a year, costing in excess of millions of dollars. Although establishing a product recall plan can aid your business in the process of effectively managing a recall, you may still need additional coverage.

A commercial general liability (CGL) policy alone doesn’t provide protection against a product recall. Instead, you must seek our specialized insurance products to ensure the protection of your business when dealing with a product withdrawal.

Product recall insurance provides protection in the event that you have to recall a product from the market or from use by any other person or organization. Coverage is triggered by known or suspected defects in your product that have caused or are reasonably expected to cause property damage, bodily injury, or death; known or suspected product tampering; and voluntary or involuntary government mandated recalls.

Product recall insurance covers first party expenses associated with a recall, including:

  • Costs to notify customers
  • Transportation, shipping, and/or packaging costs
  • Extra warehouse and storage expenses
  • Actual costs to dispose of the products, and
  • Costs of extra personnel required to manage the recall.

Coverage also includes third party liability: expenses of any third party for the recall of any product that incorporates your product, including the cost to repair or replace the product; business interruption losses of others resulting from the recall; costs to repair and rehabilitate the company’s brand reputation; and additional costs to purchase substitute goods to replace your products.

For more information on product recall insurance, contact McGrath Insurance Group at 508-347-6850 or

*This article is written for informational purposes only and should not be construed as providing legal advice.