A single product recall could cost a company its profits and potentially put it out of business. Such cases are frequent, and they draw high media attention, which may have an adverse impact on public opinion about the product in question. Your company may incur significant costs associated not only with the recall and replacement of the product, but also with restoring consumer confidence in the product and its manufacturer.
What your company does during the first days of a product recall determines its success or failure. If your company is not insured, a product recall can bankrupt you or adversely affect your business in the future.
The law states that manufacturers and sellers have a number of obligations including:
1. Ensuring the safety of all the products they sell
2. Notifying the appropriate regulatory agency within 10 days if a product does not comply with the technical regulations
3. Taking measures to prevent harm to consumers, namely:
In the event of a recall, the owner of substandard and dangerous food products, materials and products must pay for:
AIG product recall insurance provides effective management of the risks associated with product recalls. This type of insurance covers the basic costs associated with product recalls as well as expert examinations by internationally renowned consulting companies in the field of crisis management and public relations activities, which help companies to manage their reputation and image in the very important period of the first weeks after a product recall.
The costs of product recall include (but are not limited to) the following:
Manufacturers and distributors of products in the following market sectors: