General

Why you should consider contaminated product recall insurance

The recent headlines have reported that South Africa’s biggest food manufacturer issued a product recall for certain KOO and Hugo’s canned vegetable products following an internal quality assurance process that identified a small number of defective cans supplied by a packaging supplier, which was discovered earlier this year, in May.

Although the food manufacturer has advised that there is a low probability of illness and injury should the product be consumed, this product recall has brought attention to the importance of quality and food safety control, as well as the need for specialist insurance.

Product recall means that when a product may pose a potential danger to consumers, the company may spontaneously or be forced to recall its defective product. As the food manufacturer has done, many suppliers voluntarily initiate their own recalls after becoming aware that one or more of their products present a safety risk.

There are a range of reasons why a company might need to remove an item from public circulation, which may include defects such as:

  • Risk factor of harmful substances that may cause injury or death
  • There is a reason to believe the products may be defective, adulterated, contaminated, misbranded or mislabelled
  • Most common is that the food packaging was incorrect – undeclared allergens, and incorrect ingredient labels.
  • Food can also be recalled if there are any biological, physical or chemical hazards found in the food
  • Bacterial contamination such as salmonella, E-coli & listeria

Businesses must ensure that the goods they sell are safe. The need to recall a product can have devastating consequences for a business’ reputation and lead to a massive financial loss.

While businesses may have built-in system to prepare for the possibility of a product recall, while simultaneously employing strategies to avoid it altogether, the risk of incurring a product recall presents an opportunity for insurance to play a bigger role in preparing for eventualities such as this.

iTOO’s Contaminated Product and Recall Insurance policy ensures clients are covered from incidents and losses arising out of contaminations or malicious product tampering’s leading to a product withdrawal or recall which can impact the client both in a financial and reputational way.

This policy covers the insured from:

  • Recall costs, loss in profits and rehabilitation costs following either accidental or malicious contamination.
  • Accidental contamination
  • Adverse publicity
  • Government recall
  • Intentionally impaired ingredients
  • Malicious product tampering & extortion

It will also provide crisis management planning and loss prevention services through specialist expert food & safety recall consultants.

“If you are in the food and beverage industry produce, process, manufacture or sell human consumables, then you should consider the need for contaminated product recall insurance,” says Contaminated Product and Recall Insurance expert, Catia Folgore. “With insurance cover from the experts you will receive peace of mind and protection for your business for years to come from a wide range of risks, including product recalls.”

For more information click here or get in touch Catia Folgore at

Catia@itoo.co.za or 011 351 2171

 

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