Recall Insurance

A company that is run responsibly is likely to act when it finds out that there is something wrong with their product. That action is often a recall. Sending out a public notice that a problem has been discovered and that customers are urged to return the product. It should be obvious that there are costs associated with such an action. Fortunately, there is a type of coverage that can handle many of these costs: recall insurance. 


Recall insurance is also known as products recall or withdrawal insurance. It is usually a form of optional coverage that can be added to a policy that handles an operation’s regular commercial liability. However, it may also be purchased as separate coverage. 


Recall insurance responds to instances when a company either knows or suspects that its product contains a flaw or defect that may result in bodily harm or property damage to person buying and/or using the product. The coverage applies to instances of both voluntary and involuntary recalls. Regardless, it usually provides coverage for various recall expenses including: 

  • added payroll due to overtime or for hiring and paying temporary employees to assist with recall/withdrawal 
  • computer expenses 
  • costs for transportation and accommodations for withdrawal/recall personnel 
  • paper, design and printing cost of withdrawal announcements 
  • postage or fax expense 
  • proper product disposal 
  • public notification of recall or withdrawal 
  • warehouse or storage space costs 


A broader (usually separate) form of coverage can handle added costs of battling against a company’s impaired reputation. Also called crisis insurance, it handles the expense of PR and advertising activity that follows a recall event.  

Contact a Hertvik Insurance Group professional when considering recall coverage for your business.