Zurich North America’s Excess & Surplus Group is offering a new coverage for expenses related to product recalls, the company announced yesterday. The product recall expense coverage is designed for small to mid-sized manufacturers, distributors and retailers of consumer, industrial and commercial products across various industries.
The coverage offers repayment of expenses directly related to the costs of recalling a product because of the possibility of imminent bodily injury or property damage as a result of accidental defects caused by ingredients; the manufacturing process; design or raw material; malicious or intentional product tampering or adulteration. The coverage is applicable to insureds whether or not the recall is mandated by a governmental agency. As an added value, the policy also offers insureds access to a crisis communications firm to guide and assist them through the product recall.
“Product recalls are becoming a regular occurrence in every industry, and they pose a significant liability for a company’s balance sheet,” said Janet Jordan-Foster, executive vice president of the E&S Group at Zurich North America. “Not only does the company bear repair, replacement or refund expense, it also must assume the cost of transporting and disposing of the recalled goods, extra warehouse space and additional salaries for those handling the problem. Our experience with product liability claims has convinced us that the magnitude of the problem is growing and there is a real need for a product that can mitigate the financial disruption caused by the recalls.”
The Zurich product recall expense coverage is underwritten by a non-admitted member insurer of Zurich North America, with limits of $5 million. The coverage excludes aircraft, auto, chemical and pharmaceutical manufacturers or distributors.
Zurich North America is a commercial property-casualty, health and accident insurance provider serving the multinational, middle market and small business sectors in the U.S. and Canada. Headquartered in Schaumburg, Ill., Zurich North America has 11,650 employees and writes $8.0 billion in annual premiums.
Zurich North America business units are the Zurich U.S. pool of companies (Corporate Customer, Middle Markets, Small Business, Strategic Partnerships, Construction, Specialties, Zurich Global Energy, Warranty, Surety & Financial Enterprises, Empire Fire and Marine and Universal Underwriters Group) and Zurich Canada. The Zurich U.S. pool of companies is rated “A+” by A.M. Best and “AA+” by Standard & Poor’s. Zurich North America is a member of the Zurich Financial Services Group.
The Zurich Financial Services Group is a global leader in the financial services industry, providing its customers with solutions in the area of financial protection and asset accumulation. The Group concentrates its activities in five business segments: non-life and life insurance, reinsurance, Farmers Management Services and asset management.
Headquartered in Zurich, Switzerland, the Group’s worldwide presence builds on strong positions in its three key markets: the United States, the United Kingdom and Switzerland. It has offices in more than 60 countries reaching 35 million customers and employing 73,000 people. Based on consolidated figures for 2000, the Group achieved gross premiums of USD 50 billion. This amount includes insurance deposits as well as premiums from the Farmers P&C Group. The net income amounted to USD 2.33 billion.
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