Product recall
A recall can create enormous expense before anyone files a liability suit.
Product liability and product recall address different financial consequences and should be evaluated separately.
What liability may not pay
Removing product from shelves, customer notification, shipping, disposal, replacement, overtime, testing, crisis consultants, lost gross profit and brand rehabilitation are not automatically covered by general liability.
Recall policy structure
Recall forms vary widely. Coverage may depend on accidental contamination, malicious tampering, product defect, government action or a reasonable belief that use would cause injury. Definitions, waiting periods, sublimits and prior-knowledge provisions deserve close review.
First-party and third-party costs
Some programs address your own recall expense; others can include specified customer or retailer costs. Confirm who may incur covered expense and whether voluntary withdrawals qualify.
Preparation matters
A written recall plan, decision authority, traceability, customer records, mock recalls and crisis communications can reduce both loss and delay.
Product liability guidance