Product Recall Insurance 

Solutions to cover product recall risk and loss

A product recall can tarnish your company's reputation, alienate customers and have a major impact on profits. 

Allianz Global Corporate & Specialty's (AGCS) Product Recall Insurance solutions protect your company from the serious financial and operational consequences of such an event. What's more, our solutions enable access to 24/7 crisis management services from our expert partner WorldAware.

A product recall is potentially the most risk-laden situation a company can face. And whether a manufacturer, retailer or wholesaler, this risk is increasing, as supply chains grow more complex and the regulatory landscape becomes more robust. Yet businesses can often underestimate the impact of a recall and the negative effect it can have in terms of financial and reputational damage, despite the growing number of large loss events.

Our report "Product recall - Managing the impact of the new risk landscape" examines current and emerging risk and loss trends in product recall and includes exclusive insurance claims analysis. It focuses primarily on the automotive and food and beverage industries, but also incorporates other sectors. The report also highlights the increasingly important role of crisis management services, including specialized insurance, in a recall scenario and outlines what can be done to mitigate the fall-out when an incident occurs.

Download the full report
Product recalls in the automotive sector can prompt original equipment manufacturers (OEMs) to demand that parts suppliers reimburse costs caused by a defective part. To address exposures arising from these situations, we provide coverage for first- and third-party exposures, including impaired property.
Recall of defective products
  • first and third party recall expense including governmental recall expenses like media and communication costs, disposal and/or destrution or storage
  • repair and labor costs
  • refund, replacement and redistribution expenses
  • costs of independent consultants and advisors
  • defense costs
  • impaired property coverage for non-safety critical component parts
  • financial loss due to property damage
  • business interruption (loss of gross profit)

Recalling, replacing or destroying a consumer product can incur substantial long-term reputational and financial costs for your business.

That's why we've developed a Product Recall Insurance solution that provides cover for recall, loss of profit, and rehabilitation costs following a product recall event.

  • product defect
  • malicious tampering
  • governmental recall
  • adverse publicity
  • intenionally impaired products
  • first and third party recall expense
  • all reasonable expenses to inspect, withdraw, destroy, and replace the product
  • business interruption (loss of gross profit)
  • rehabilitation
  • third party recall liability
  • customer loss of profits
  • unsubstantiated recall costs
  • crisis management fees and expenses
Whether it's accidental, alleged, or malicious, product contamination can negatively impact your company's reputation and profitability. We can provide you with expert crisis management planning, loss prevention, and incident response services, so you can protect yourself against product contamination risks. We also offer bespoke packages for certain sectors, such as food and drink, as well as crisis support and risk prevention services.
  • accidential contamination
  • malicious tampering
  • governmental recall
  • adverse publicity
  • intentionally impaired ingredients
  • first and third party recall expenses
  • all reasonable expenses to inspect, withdraw, destroy, and replace the product
  • business interruption (loss of gross profit)
  • rehabilitation
  • third party recall liability
  • customer loss of profits
  • unsubstantiated recall costs
  • crisis management fees and expenses
 The products and services described on this page may not be available in all AGCS locations. Please contact your  local office for full information on local product availability.

We partner with WorldAware, a global crisis management assistance company, who are on-hand to provide you with 24/7 crisis management and support services for product recalls and contamination, emergency incidents, and evacuations.

Whilst it is important to have a professional response company at your disposal at all times, it is equally important to prepare and work on implementing plans and procedures to either prevent a loss from happening or to more effectively respond to an incident. AGCS will support pre-incident services by contributing up to 10% of the net premium towards these measurements, e.g. updated crisis management plans, recall plans, incident simultations, communication planning, etc.

In order to their crisis management services, you'll gain access to their knowledge portal, which contains extensive safety, security, and travel-related insights and information.

Product recall exposures have increased significantly over the past decade, meaning that there is an increased potential for larger and more complex losses. Defective products not only pose a serious public safety risk but can also cause significant financial damage to the companies responsible.

Christof Bentele discusses the considerable risks associated with product exposures and illuminates the insurance solutions that can help customers better manage them.

Annual survey identifying business risks

Technology is breeding new threats as well as business models. Traditional risks such as natural catastrophes continue to challenge while other threats such as cyber, neck-and-neck with business interruption at the top of the Allianz Risk Barometer 2019 for the first time, reputational risk, increasing exposure to intangible assets and volatility and consolidation in the corporate environment evolve daily.

  1. Loss of reputation or brand value belongs to the the top 10 global risks of 2019's ranking
  2.  
  3. It is estimated a company could add as much as 20% of value or lose up to 30% depending on its reputation risk preparedness and management in the immediate aftermath of a crisis. 
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With the Allianz network AGCS provides services in over 200 countries and territories.