News – January 2011
Could you afford to recall and replace some or all of your products?
Or to compensate for a serious flaw in your service?
It is common for companies involved in manufacture to have Product Liability insurance to protect against damages awarded as a result of personal injury or property damage caused by the product they produce or supply.
However, often overlooked is the financial impact and damaged reputation that can arise from a product recall or guarantee claim, should the products be defective.
In recent years the number of cases where faulty products have led to personal injury and property damage has increased dramatically. Manufacturers are becoming increasingly aware of their responsibilities to monitor products, and keep these problems to a minimum. As a result, the number of product recalls is on the rise.
In the case of a product recall or defective product for which you are legally liable, you, as a manufacturer, could be responsible for the following expenses:
- Costs of notifying customers
- Extra warehouse and storage space (for storing the recalled products)
- Costs of disposing of the product
- Cost of recall if your product forms part of a third party product
- Financial loss of your customer
- Brand repair and rehabilitation
- Costs of replacing goods or providing substitutes
Whilst product liability insurance includes some protection, it does not cover the costs incurred to withdraw and replace a product.
How would your company survive in the event of a product recall?
Products guarantee, financial loss and products recall insurance is available and provides cover for the following:
- Product Recall insurance protects businesses from the costs of recalling defective products.
- Product Guarantee insurance protects businesses from the costs of replacing, recovering, repairing and altering products that are defective due to faulty design, manufacture or installation.
- Financial Loss insurance will meet the financial losses suffered by customers or third parties as a direct consequence of the product failing.
With nearly 30 years of experience, AE Insurance Brokers are aware of the damage that instances of this type can cause to businesses, and how it can it can affect their future plans and long-term objectives. We are able to provide quotations from a range of insurance providers to find a suitable solution for your business.
Your company's brand and reputation could easily be destroyed if a crisis is not managed properly.
Product recall insurance could save your business.
If you would like to find out more about product recall, guarantee and financial insurance, contact Ae Insurance Brokers on 02380 558200 or use the contact form.