Product Recall & Economic Loss
In addition to property loss, product recalls may also result in significant economic loss.
Consider this case study.
Spicy Products, is a food manufacturer which imports ingredients from overseas used in a variety of products including soy sauce.
A quantity of the spices contain undesirable bacteria fortunately detected before the product was released to customers but unfortunately detected after a large volume of the soy sauce was produced.
Not only must the contaminated finished product be destroyed but it may take several months to complete testing, identify the offending ingredient, source a fresh supply of unadulterated spices and manufacture a fresh batch for release to customers.
In the interim, a competitor, Traditional Flavours, undercuts Spicy Products and wins their customers. Spicy Products suffers a considerable, long-term economic loss.
This will need to be quantified and claimed against any insurance cover which may be held by Spicy Products or against the offending spice supplier and/or their insurers.
Author
Published with permission of Claim Solutions Pty Ltd
Insurance Policy
Country: - Australia.
Policy Description: - Liability, Product Recall.
Insurer: - Various..
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