Product recalls are quite common. As a manufacturer in Florida, a recall of one of your products could be costly and damage your reputation or the reputation of your business partner. Every Orlando manufacturers insurance should contain product recall coverage. It pays for logistical costs of a recall and helps re-establish your company’s brand or that of your business partner. It consists of two parts and covers these expenses.
1. Your Direct Expenses
Product recall insurance covers all direct expenses in conjunction with a product recall. It pays for the advertising cost associated with notifying customers, shipping costs to collect the recalled product, and extra warehouse expenses. Furthermore, it covers the cost for disposing of the product and extra personnel required to conduct the recall.
2. Third-Party Expenses
Product recall insurance pays for damages a third party sustains due to the recall of a product that you manufactured. It pays for all expenses of the third party, including repairing or replacing your product. Third parties are likely going to lose income due to the recall. This insurance covers the business interruption of third parties and the cost of having to purchase substitute products. If you are manufacturing a product for a third party, your recall could damage their reputation. Product recall insurance makes sure that your business partner is taken care of.
Product recalls are on the rise and can be financially devastating to your manufacturing business. With comprehensive Orlando manufacturers insurance, you don’t have anything to worry about. An insurance specialist can help decide which coverage you need.