image of bottles being manufacturedIf you’re a manufacturer, you want your products to come out without a hitch. This ensures that customers get exactly what they asked for, a functioning item. If your products malfunctions, it could cause significant cost losses, bodily injury or other damages to your clients. You might therefore have to recall some or all of that product.

A recall occurs when your business asks clients to return their products because you discovered a fault in the items. By recalling these items, you can reduce the chances that these products will harm other people. This reduces the liability risks to your company. By making use of your business insurance, you can often receive assistance for the costs associated with recalls.

When a Recall Occurs….

There are various rules for when a recall is necessary. However, an overarching principle of a recall is that it should usually happen if faulty product clearly violates a known safety rule or poses a public safety risk. If you discover that some of your product may pose contamination, damage or fault risks to your clients, you should consider issuing a recall.

Depending on the product in question, you likely have to follow differing routes to issue the recall:

·         Know the ways you have to report the recall to proper regulatory authorities. You may have to contact the U.S. Product Safety Commission (USPSC) to begin the recall process. Other notifications for additional regulators may also be necessary.

·         When issuing a recall, follow the guidelines set by these authorities. The USPSC and other entities issue comprehensive rules for reporting and issuing recalls.

·         Establish guidelines to ensure you properly conduct the recall. You likely need to prepare rules for gathering, documenting and disposing of faulty products.

One of the biggest parts of a recall is public notification. You have to let your customers and the greater public know about the recall so they can stop use of your product and return it to you. You may have to make a public announcement, and possibly even initiate individual contact with affected customers.

How Manufacturers Insurance Can Help

Manufacturers generally carry varying degrees of liability insurance. One type of coverage they should consider carrying is product liability insurance. This coverage can help the business in case its products cause harm or other financial losses to clients.

Product liability coverage may include recall protection coverage. This more specific insurance can help the manufacturer mitigate cost losses associated specifically with recalls. It might help cover public notification costs, disposal costs, public relations management and other needs.

Carefully inspect your product liability insurance when you get it. Sometimes, product recall insurance comes as part of your general PL policy. Other times, you have to get the coverage separately.

Need product recall insurance? Let Buschbach Insurance Agency, Inc. help. Give us a call at 708-423-2350 for a fast, free policy quote.

Here are some additional resources for your business.

What is a Certificate of Insurance and why it is so Important?

Five Insurance Mistakes Small Business Make

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