Ironshore Pembroke Managing Agency Ltd. is offering Product Contamination Recall Insurance, focusing on risk exposure within the food and beverage industries.
Contamination and subsequent recall occurrences can be triggered by accidental human error, malicious product tampering and product extortion throughout the manufacturing and distribution processes.
Pembroke’s Product Contamination Recall cover provides insurance protection for incident response expenses associated with product withdrawal, communication and rehabilitation costs on a first and third party basis. Business interruption coverage for gross income loss is available for a period of up to 12 months from the actionable event. Additional coverage for reimbursement of expenses is obtainable for government recall demand and adverse publicity exposure. Coverage can be underwritten at pricing minimums of $10,000 per $1 million of coverage, with policy limits available of up to $15 million.
The company said it developed the program in response to the increasing volume of consumption product recalls, which it said are averaging 25 to 30 incidents per week on a global basis.
“With due diligence and corporate governance in place, companies within the food and beverage industries cannot completely remove the risk of human error, product tampering or other influencing factors that activate a product recall,” said Adam Parsons, divisional director of Product Recall. “Our policy indemnifies for rehabilitation costs and loss of income to protect client cash flow and resolve satisfactory product reinstatement in the wholesale and consumer marketplace.”
A July, 2015 report by Swiss Re found that since 2002, the number of food recalls in the U.S. has nearly doubled, influenced by regulatory changes and an increasingly globalized food supply chain. Fifty-two (52) percent of all food recalls cost the affected U.S. companies more than $10 million each and losses of more than $100 million are possible, according to the Swiss Re report.
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