I produce food – what if my product is contaminated?
Many of you will have seen instances recently where food and beverage industries have been impacted by contamination or suspected contamination, either accidental or malicious. You may also have wondered about the costs to the business affected by these recalls and how those business can protect themselves against that loss. The financial costs involved in recalling products may be obvious (in fact you may be contractually obliged to reimburse your customers for these costs) but less obvious costs also need to be considered.
Your standard Public Liability (or Farm Liability) cover may not respond to some of these events and almost certainly will not provide all of the cover you may need when your product is contaminated.
The good news is that there are insurance solutions in the marketplace. These are specialised products and you will need an insurance broker to advise you on what products are available and what is suitable for your business.
Products are available that will provide cover (subject always to policy terms and conditions) for;
Accidental Contamination.
Malicious contamination or product tampering.
Extortion costs following product tampering.
Adverse publicity or reputational damage.
Following one of the above events you can protect yourself against;
Business Interruption
If your turnover and profit is affected by an insured event, you can access cover for the economic loss incurred.
Replacement Costs
You may be able to be covered for the actual cost of replacing items which have been recalled and are unable to be sold.
Recall Costs
You may be covered for the cost of recalling your product. As you can imagine the costs could be significant and may include advertising costs, transport costs, storage, and disposal costs. You may be held liable for these costs by the person or business you have supplied to.
Crisis Costs
You may need cover for the cost to protect your business reputation or to manage a crisis.
