Product Recall Insurance for the Food & Agriculture Sector

Product recall within the food and agriculture sector has surged both in number and severity in recent years. Growing consumer awareness, regulatory scrutiny and social media responses combine to create a serious challenge for manufacturers and retailers.

With contaminated food products almost always destroyed rather than recalled, these incidents can cripple balance sheets, not just in third-party costs but also through termination of contracts and lost future business, not to mention the longer-term reputational impact.

As hygiene and safety standards in the food and agriculture increase, and product scrutiny becomes more stringent, more retailers will demand suppliers have robust product recall insurance in place if they want to work in partnership. Purchasing such cover might come at a cost, but it also creates financial security and makes the business more attractive to larger retailers.

We offer an integrated product recall insurance tailored for the food and agriculture sector.


Businesses focus on selling products and/or services to customers. But a product recall event reverses that focus.

Instead of pushing product out, you’ve suddenly got to pull it back. There are very few businesses that understand the practical implications of a product recall event or that have the requisite skills to deal with them effectively.

This is shown in the difference between the perceived impact and the actual impact of a recall event. Many companies perceive business interruption as one of the smaller exposures associated with a product recall event.

But in reality, it’s their biggest exposure and this misunderstanding highlights the need for companies to explore their product recall arrangements and insurance coverage.

Our product recall insurance product offers you:

  • First-party and third-party recall expenses
  • First-party and third-party business interruption cover
  • Pre-recall expenses, including strategies for putting a recall procedure in place
  • 24/7 crisis response with support in handling the public response
  • Rehabilitation expenses.

As legal powers increase to impose fines and enforce a recall, an extension is available to cover government recall.

Malicious product tampering, product extortion and adverse publicity are also standard perils.


Product recall insurance provides cover for accidental contamination – 95% of claims – malicious product tamper and extortion. The insurance responds to events where there’s potential to create bodily injury.

But do you have the in-house capability to examine a contaminated product? Could you assess the threat it poses to people’s health, pinpoint the source, and liaise with the appropriate government, regulatory and industry bodies?

How quickly could you create consistent, multichannel communications? Could you manage negative publicity and enact an effective crisis management strategy?

All of this must be done within hours. There’s then the challenge of deciding what products to recall, identifying their location and deploying the necessary resources to make it happen. And while this happens, how do you meet orders? Could you fulfil contracts? If not, how quickly will they be lost and when will you get the opportunity to win them back?

Product recall is not a matter of losing production for a day or two. It has the potential to kill your brand and your business.

Get it right and customers, suppliers and regulators will respect you as a professional business that takes its responsibilities seriously. Get it wrong and they see you as a company that can’t cope in a crisis, doesn’t value public health and puts profit above customer safety.

Product recall insurance provides cover for first- and third-party recall expenses, business interruption losses and brand rehabilitation. It also provides pre- and post-loss access to expertise.

General liability policies won’t cover all these exposures or offer sufficient limits. Product recall insurers will provide access to crisis management experts, PR specialists and food technicians. Some will provide funding for pre-loss activity such as reviewing existing recall plans, auditing suppliers and delivering in-house training.

Once an insured event has been identified, the policy will pay out for a range of losses including:

  • Pre-recall expenses
  • Recall expenses
  • Third party recall expenses
  • Loss of gross profit
  • Rehabilitation expenses
  • Increased cost of working
  • Product extortion demand.

It is important to understand the difference between product liability and contaminated product insurance. Product liability covers a business’s liability arising out of their product causing third party bodily injury or property damage. Contaminated product insurance covers the recall costs of any product which has, or is imminently likely to cause third party bodily injury or property damage. Interestingly enough, if a client was to purchase both covers, then a recall policy could save far more significant costs than a product liability policy, if that contaminated product can be recalled before it can cause bodily injury claims.

The majority of product recall policies also give clients access to a crisis management consultant, the value of which cannot be underestimated. Imagine, for example, the plight of a food manufacturer that has just discovered salmonella in one of its sauces.

How is the source identified? How is the production site sealed? Was the contamination accidental or malicious? Who carries out tests to verify the discovery? Who manages the communications to staff, customers and suppliers? Who liaises with the Food Standards Agency and the Health and Safety Executive? What information do they need and what format must it be supplied in?

Crisis management consultants can provide onsite crisis scenario training, where they will put together a relevant and live scenario and play it out. This lets everybody see how the crisis management team reacts to the scenario and where improvements can be made.

There are also other pre-loss services to help contain a loss, including a documentation review, crisis management training and mock audits. These audits let firms see if their processes and practices are compliant and can be extended to examine the entire length of the supply chain. Whilst training will help companies keep employees up to date with the latest industry guidelines and regulations.


Due to the growing impact of social media, it is imperative for companies to employ risk management resources to react quickly in a crisis. We recognise the importance of a strong crisis management as being integrated to a comprehensive recall insurance offering.

Our crisis consultancy service includes:

  • Dedicated network of crisis consultants
  • Pre-incident consulting
  • External risk monitoring
  • Social media preparation
  • Recall simulations
  • Seminars and training workshops
  • 24/7 hotline

Why choose an integrated solution:

  • Market-leading specialist wording aligned to specific sector exposures
  • Pre-and post-loss crisis management support
  • Specialist claims management
  • Aligned sector-specific consulting advices
  • Non-damage/non-bodily injury trigger (bespoke extension)
  • Market-leading facility rates

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