Product Recall Insurance 
Get Product Recall Liability Insurance to Handle Defects & Consumer Risks
A product recall can be costly, damaging both finances and brand reputation. Product recall insurance helps cover expenses related to retrieving, disposing of, and replacing defective products. Whether you manufacture, distribute, or sell goods, this type of coverage provides critical protection when unexpected issues arise.
What Is Product Recall Insurance?
This type of coverage protects businesses from the financial and operational costs of removing unsafe or defective products from the market1. This coverage focuses on recall expenses and brand protection, not just injury claims, making it a critical safeguard for companies facing high recall risk.
What Coverage Includes
This protection pays for the direct costs of managing a recall and minimizing business disruption, including:
Product disposal or replacement
Customer notification costs
Logistics EXPENSES
It also covers additional personnel expenses like overtime and temporary staffing, third-party losses affecting distributors or retailers, and business interruption losses from reduced income or increased operating expenses.
Common Triggers for Claims
Product recall insurance responds when a recall is triggered by safety, regulatory, or reputational risks, including:
- Accidental contamination or unintentional product defects
- Malicious tampering or product sabotage
- Product extortion threats
- Government or regulator-mandated recalls
- Adverse publicity requiring immediate recall action
Who Needs Product Recall Insurance?
This type of insurance is essential for businesses that manufacture, distribute, or sell products where a recall could cause severe financial or reputational damage, including:
- Food and beverage manufacturers, processors, and packaged food brands2
- Beverage producers and specialty food companies
- Consumer product manufacturers and distributors
- Electronics and technology product manufacturers
Product Recall Insurance vs. Product Liability Insurance
Each of these types of insurance protect against different risks. Generally, product recall insurance pays for the cost of removing products from the market, while product liability insurance covers third-party injury or property damage claims. Standard liability policies often exclude recall expenses, making specialized recall coverage necessary.
Get Product Recall Insurance
Your Gild Insurance Agent is here to understand your business and find the right coverage tailored to your needs.
For a free, online quote in minutes, try out Gildber! The fast, hassle-free option for a business insurance.
Frequently Asked Questions
What is product recall insurance?
This type of insurance helps cover the costs associated with removing a defective or contaminated product from the market. This can include expenses related to notifying customers, retrieving products, and managing the recall process.
Do I need product recall insurance for my business?
You may need this type of insurance if you manufacture, distribute, or sell physical products. Businesses in food, beverage, consumer goods, and health-related industries often face higher recall risk and financial exposure.
What does product recall insurance cover?
It can cover recall-related expenses such as customer notification, product disposal, shipping, and certain crisis management costs. Coverage varies by policy and product type.
Is product recall insurance included in general liability insurance?
It is usually not included in general liability insurance. It is typically purchased as a separate policy or endorsement to address recall-specific costs that general liability does not cover.
