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Product Recall

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Market Overview

Product Recall: Industry Information

The coverage has been around since the 1980s. The first type of product recall insurance was called malicious product tampering, which only responded to malicious incidents. The limits were $3 million, with six-figure premiums. That's the way it was for a couple of years. Slowly the book of business grew which allowed larger capacity and to sell higher limits of insurance as well as to expand the coverage.

 

Because it's catastrophic insurance in nature, when losses occurred, they are generally major. Clients are not concerned with the smaller losses they can handle financially in house. What they are looking for is protection from the large losses.

 

So today, it's financially plausible for small companies as well. When coverage first came out, because of the price tags and the minimum deductibles required, it was accessible only to large, multinational food companies. But now almost every insurer has a strategy to go after smaller businesses. Products Recall is designed to help the insurance manage the crisis of such an occurrence and help protect against product degradation and third party lawsuits.

 

In addition to Products Recall, we can provide a wide range of other crisis management programs including:

Contaminated Products Insurance

Designed for food and beverage companies, Contaminated Products Insurance covers losses associated with malicious product tampering and accidental product contamination. Coverage encompasses the far-ranging costs associated with these incidents, including the costs of the recall itself and related business interruption, business rehabilitation and consultant expenses.

 

Kidnap & Ransom/Extortion Insurance

Essential for companies with overseas employees, executives who travel frequently and high net-worth or high-profile individuals and their family member's business interruption, business rehabilitation and consultant expenses.

 

Insurance response to losses arising from kidnapping or extortion events, including: kidnapping or alleged kidnapping; bodily injury extortion; property extortion; product contamination extortion; trade secret/computer virus extortion; wrongful detention and hijacking.

 

Specific losses addressed under the policy include: ransom/extortion monies; in-transit/delivery fees; kidnap & ransom response consulting fees; judgments, settlements and legal costs; and death and dismemberment.


Coverage Parameters

Products Recall offers insurance protection in the event of a recall of an insured's product. This protection includes coverage for the insured's product recall expenses and liability to third parties kidnapping; bodily injury extortion; property extortion; product contamination extortion; trade secret/computer virus extortion; wrongful detention and hijacking.

Endorsements available to extend coverage include:

  • Cost to Refund, Repair or Replace Insured's Product
  • Worldwide Coverage
  • Impaired Property Recall Response is available

 

Customer Profile: Recall Response is designed for the following types of operations:

  • Machining, stamping, assembly and heat treating operations
  • Metal and plastic component manufacturing
  • Food and beverage
  • Consumer product manufacturing
  • Electronic component manufacturing and equipment
  • Packaging and bottling operations
  • Medical products
  • Children's products
  • Pharmaceuticals
  • Distributors of foreign goods in the United States

 

Targeted Classes: Classes of business include food & beverage, medical, pharmaceutical, consumer and industrial products.

Target classes include: In addition to Automobile Component Parts and Tobacco products the following are targets:

     
  • Bakery 
  • Breweries  
  • Bottle Manufacture  
  • Can Manufacture
  • Computers
  • Electronic components
      
  • Exercise Equipment
  • Firearms & Ammunition
  • Food Flavorings
  • Furniture & Fixtures
  • Household Appliances
  • Medical Products
      
  • Meat  
  • Meat or poultry accounts
  • Printing/Packaging
  • Safety Products  
  • Toys & Games
  • Vitamins

 

Product Features:

Product Recall Expenses up to $10 million

Product Recall Liability up to $10 million

Minimum Premium $7,500

 

Our carriers can provide expert knowledge of various recall coverage's available and tailor our program to fit the requirements of an insured. In the event of a recall, claim expertise and a legal panel are available to guide an insured through government regulations and requirements.

 

Policy Features

Coverage A pays the first party expenses associated with the recall, such as notification, shipping, warehousing and additional personnel. Through attachment of an endorsement, Coverage A can be extended to include the cost of repair, replacement or refund of the product.

 

Coverage B provides coverage for the claims by third-parties seeking damages due to a product recall. Coverage B may be extended by endorsement to cover liability for impaired property. The optional impaired property endorsement provides coverage for the insured's products being incorporated into another company's product and causing it to not function properly.

 

Submission Requirements:

  • Completed Products Recall Insurance Application
  • 5 years or prior carrier premium & loss information

Recall Response is available non-admitted in all states.

 

In addition to Products Recall, we can provide a wide range of other risks management programs including:

 

Contaminated Products Insurance: Designed for food and beverage companies, Contaminated Products Insurance covers losses associated with malicious product tampering and accidental product contamination. Coverage encompasses the far-ranging costs associated with these incidents, including the costs of the recall itself and related business interruption, business rehabilitation and consultant expenses.

 

Classes of Business - CPI

Classes of risks include a wide variety of manufacturers, processors, and retailers in the stream of commerce of the food supply chain as well as pharmaceutical and cosmetics. The major eligibility factor is that the product must be ingestible or topical. Typical food risks include canneries of fruits and vegetables; manufacturers of grocery products such as breakfast cereals and boxed flour or grain products; condiments; baked goods and snack food; and supermarket chains.

Target classes of business include:

      
  • Bakery 
  • Spirits, Wines and Breweries
  • Candy  
  • Chocolate
      
  • Coffee/Tea  
  • Cookies and Crackers  
  • Dry ready to eat meals
      
  • Retail  
  • Supermarkets
  • Spices

 

Kidnap & Ransom/ Extortion Insurance

Essential for companies with overseas employees, executives who travel frequently and high net-worth or high-profile individuals and their family members, Kidnap & Ransom/Extortion Insurance response to losses arising from kidnapping or extortion events, including: kidnapping or alleged kidnapping; bodily injury extortion; property extortion; product contamination extortion; trade secret/computer virus extortion; wrongful detention and hijacking.

 

Specific losses addressed under the policy include: ransom/extortion monies; in-transit/delivery fees; consulting fees; judgments, settlements and legal costs; and death and dismemberment.


Insurer(s)

MarketScout has various A-Rated or better carriers that can provide International Coverage.


Commission Schedule

7.5-10%, depending on the line of coverage and size of the account.


Application Requirements

MarketScout Producer Agreement Required along with E&O verification and respective state license. No premium volume requirements. We operate on 'open market' basis. We consider one off submissions. We file the tax.

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