Recall Meets General Liability
Article, CLM Magazine – May 2017
Understanding policy interactions can make a world of difference. Simon Oddy discusses the differences between product recall and product liability insurance in CLM Magazine.
As appeared in CLM Magazine, May 2017.
By: Simon P. Oddy
Companies in the food, auto, and consumer goods industries frequently integrate ingredients and components from a supply chain that can stretch around the world. The goal? To sell quality finished products from store shelves and internet sites. But when a product failure or contamination event triggers a recall, the financial impact and stress placed upon the global supply chain can quickly become a major problem and a financial nightmare for all involved.
We are seeing increased awareness by companies of the need for both product recall and product liability insurance coverage. In a recall situation, multiple lines of insurance may be asked to respond to address the financial damages incurred by a company. These insurance programs, often intended to work together, actually can lead to some friction. Knowing the roles and purposes of product contamination insurance coverage, product recall cover, and product liability coverage can have a significant impact on a company's expectations when faced with a claim.