The RecallReady team at Colemont has developed an exclusive new program designed to address the product recall, withdrawal expense, and recall liability exposures of smaller and mid-sized manufacturers of products with replacement value of less than $100.
Prior to the launch of this program, coverage of this type was too expensive for all but the larger firms or manufacturers of high-risk products. As a result, many smaller companies have had little option but to self-insure and hold the exposure themselves. With the implementation of the Consumer Product Safety Improvement Act of 2008, and given the standard exclusions under product liability forms for recall losses, this new program seeks to provide an affordable option to respond to the new exposures of today’s world. This is a standalone policy – not an endorsement to a product liability policy.
Policy Trigger
- “A product withdrawal initiated in the coverage territory during the policy period because you determine that the product withdrawal is necessary; or a government entity has ordered you to conduct a product withdrawal.”
- "A product withdrawal means the recall or withdrawal from the market; or from use by any person or organization; of your products or products which contain your products because of known or suspected defects (a defect, deficiency or inadequacy that creates a dangerous condition) in your product, or a known or suspected product tampering which has caused or is reasonably projected to cause bodily injury or physical injury to tangible property other than your product.”
Coverage for Product Withdrawal Expense
- Replacing your product, repairing the defect in your product, or repurchasing your product for the initial purchase price (whichever is less)
- Cost of notification
- Cost of stationery, envelopes, postage
- Cost of overtime paid to regular employees
- Cost of computer time
- Cost of hiring independent contractors and other temporary employees
- Cost of transportation, shipping, or packaging
- Cost of warehouse or storage space
- Cost of proper disposal or your products that cannot be reused
Product Withdrawal Liability
Coverage for those sums that you become legally obligated to pay as damages for product withdrawal expenses incurred because of a product withdrawal. The carrier will have the right and duty to defend you against any suit seeking those damages.
Carrier
Great American E&S Insurance Company (non-admitted)
Available Limits
- $250,000 with a $1,000 minimum premium
- $500,000 with a $2,500 minimum premium
- $1,000,000 with a $5,000 minimum premium
Minimum Deductible
$2,500
Territory
Worldwide
Target Industries/Products
- Annual revenues less than $100 million
- Non-consumable consumer goods under the authority of the Consumer Product Safety Commission
Excluded Products
Including but not limited to:
- Safety-critical automotive products
- Children’s toys, clothing, and furniture
- Any infant-related products
- Power adapters and batteries
- ATVs/snowmobiles
- Scuba and related
- Skis/snowboards and bindings
- Bicycles
- Candles
- Exercise equipment/machines
- BBQ grills
- Lawnmowers
- Ovens/ranges
- Products with a replacement value greater than $100