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PRODUCT RECALL EXPENSE COVERAGE

Don't let a recall become a crisis. Product recall expense coverage from Selective can help you navigate the recall process and reduce financial and reputational losses.

A product recall can include the withdrawal, inspection, removal, or disposal of a product from the market. Any company that manufactures, assembles, wholesales, or distributes products can experience a recall. And they happen more frequently than you might think.

Product recall risks and expenses vary across industries, so Selective works with you and your agent to create the right solution based on your business needs.

Contact your independent agent to get started today.

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PRODUCT RECALL EXPENSE COVERAGE FROM SELECTIVE

Selective's product recall expense coverage offers broad coverage, including protection for direct and indirect product recall expenses, and does not have prior manufacturing or sales date restrictions. Policies with our General Liability ElitePac® Extension Endorsement automatically receive product recall expense coverage with a coverage limit of $25,000 and the option to purchase increased limits.

Product Recall Expense

Selective's product recall expense coverage endorsement includes coverage for eight expenses to help you protect your business against the costs associated with a covered product recall:

Costs of advertising
Costs of stationery, envelopes, production of announcements, and postage or facsimiles
Costs of overtime paid to regular non-salaried employees and expenses incurred by employees, including transportation and accommodations
Costs of hiring independent contractors and other temporary employees

Costs of transportation, shipping, or packaging
Costs of warehouse or storage space
Costs of proper disposal of "your products," or products that contain "your products" that cannot be reused, not exceeding "your purchase price" or "your cost to produce the products"
Inspection and testing of "your products" to determine whether or not they may be subject to a "product recall"

We offer coverage for the following additional covered expenses at 50% of the policy's product recall expense limit. The additional covered expenses limit can be allocated at your discretion if there's a covered loss:

Cost to replace affected products: the cost to produce or acquire a like replacement product, including the cost to return your product to the purchaser, not to exceed the cost of goods sold. It also includes the price of unsold finished stock, but only if it cannot be repaired, reconditioned, decontaminated, or made marketable.
Customer's consequential loss of profit: the loss of financial gain incurred by your direct customers as a consequence of the product recall of your product or the product recall of their product because it incorporated your product.
Good faith advertising: advertising costs paid for the specific purpose of regaining customer approval or faith in your product.

Contact your independent insurance agent to discuss which product recall expense coverage options suit you best.

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Commercial Lines Customer

BUSINESSES THAT BENEFIT FROM PRODUCT RECALL EXPENSE COVERAGE

Manufacturers

Wholesalers

Importers can benefit from product recall expense coverage from Selective

Distributors

Selective can help you get the right product recall coverage limits based on your business needs. Contact your local independent agent to discuss your coverage options and to get a quote.

Product recall expense coverage helps protect beyond standard commercial general liability insurance

Does Your Business Insurance Cover Product Recall?

Standard commercial general liability coverage typically excludes product recall expenses. Selective's product recall expense coverage can help mitigate the impact of some of those recall risks.

Click here to How to Reduce Product Recall Risks about Does Your Business Insurance Cover Product Recall?

FREQUENTLY ASKED QUESTIONS ABOUT PRODUCT RECALL EXPENSE COVERAGE

What happens if I ignore a product recall that affects my business?

Ignoring a product recall that affects your business can have serious consequences, including legal exposure, regulatory penalties, and fines. Moreover, your business's reputation can suffer, resulting in negative publicity, loss of customers, and damaged brand image. These harms can also lead to the loss of business opportunities and increased regulatory scrutiny.

What is an example of Product Recall Expense Coverage in action?

An auto-parts manufacturer applied improper paint to suspension parts which could lead to excess corrosion and part failure – with the risk that a driver could lose control of the vehicle. Deciding to recall the parts, the parts maker faced costs of more than $86,000 for employee overtime, travel to visit customers, independent inspections, replacing products, and advertising. The company turned to its product recall insurance as it recovered from this threat to its business.

Whether and the extent to which coverage exists in connection with any situation turns on the actual facts and the insurance policy's terms, conditions, limitations, and exclusions. The preceding is provided solely for illustrative purposes.

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