Product recall: attractive market conditions for insurance buyers

The product recall insurance market is currently offering favourable conditions for clients. This is due to an influx of new entrants into the marketplace, both in the US and London predominantly. Insurers are either backing Managing General Agents (MGAs) or hiring specialist underwriters in-house to diversify their insurance offerings. As a result, capacity available for product recall risks has reached record levels, creating a soft rate environment for insurance buyers. Further, insurers are more willing to extend out coverages, and to quote industries they would previously have shunned.

However, market conditions could change in the future with an uptick in the frequency and severity of losses in the recall space, with greater scrutiny from regulators and the general public on the protection of consumer welfare. Underinsurance has been a major issue for clients in the last 12 months with some catastrophic product recalls. One case involved a peanut butter manufacturer whose products were contaminated with Salmonella Senftenberg. This has resulted in 21 confirmed cases in 17 US states and four hospitalisations – but thankfully, no deaths. Another case involved a food firm in California that had to recall nutritional and beverage products because of potential microbial contamination, including from the organism Cronobacter sakazakii. The US Food and Drug Administration found that a processing facility in Wisconsin was operating in serious violation of federal regulation.

It’s not just the food and beverage sector that is being affected, but a multitude of industries seeing more recall related events. In particular the automotive industry which has seen some issues with the fast transition to EV and advanced assistance vehicles.


  • Insurers value good third-party food safety and quality audit report scores

  • Strong contracts with suppliers and customers (i.e. rights of recourse being available and limitations of liability with customers where possible)

  • A detailed submission to insurers is always helpful to secure the best outcome for clients in the negotiation of rates and terms and conditions

For more information, please contact:

Freddie Schlesinger – Vice President, Product Recall & Reputational Risk

M: +44 (0)7769 248 552


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