The costs of recall can be very expensive and can cause extensive reputational harm to a business.
Recall policies should provide protection against;
- Recall costs: The cost of recalling, replacing, and destroying defective products
- Loss of revenue: The cost of lost business or contract revenue
- Legal fees: The cost of legal representation and any settlements or judgments made against the business
- Third-party costs: The cost of any third-party financial loss
- Reputation damage: The cost of damage to the business’s reputation
Traditional products liability do not cover these costs unless they are directly attributable to indemnifiable claim.