This covers the expense incurred by the insured party in notifying the public and recalling products when they present a hazard to people and/or property, or are faulty.
Recall costs may include:
- Public notification
- Finding and tracking products
- Emergency, isolation, extraction and transportation measures in order to isolate the incriminated product
- Storage costs
- Additional costs for labour and equipment hire
- Product destruction costs
Product recall expense insurance is essential when the products sold, manufactured or delivered are intended for mass consumption. If a consumer product on the market is found to present or suspected of presenting a risk to the health or safety of consumers, the product must be removed from sale. This recall may be voluntary or ordered by a relevant authority.