Product recall insurance is now a “must have” for food production firms according to a Gallagher specialist.
Stephen Elms, National Head – Food Production at Gallagher, said that the cover has become even more relevant for food producers in the wake of the strawberry crisis that gripped Australia earlier this year.
With copy-cat events seeing the crisis rumble on for weeks, Elms said that food producers now need to consider product recall insurance as a “must have” for their business.
“We have had clients enquire about the cover and it is absolutely a must have for food producers,” Elms said.
“No matter what food or beverage is produced, product recall cover is important as it allows the business to be protected should their product need to be pulled off the shelves for any reason.”
While the strawberry crisis may have highlighted the issue, product recall cover has become more important thanks to regulatory changes.
Under the Food Standards Act, any issue with food or beverage whether that be a recall or withdrawal or something smaller, needs to be notified into the public domain.
Product recall insurance features several benefits that food producers may need to utilise in the event of a recall or notification, such as:
- recall, replacement and extortion costs
- consultation expenses
- business interruption
- brand rehabilitation costs
While the recall of product may be the first thing that springs to mind, the reputational element of the cover in its brand rehabilitation aspect is also important. This can provide producers with expert help from PR or brand management firms to help navigate the difficult times that can come following a product recall.
While product recall can offer some protection against damage to your brand, Elms also recommends securing stand-alone reputational insurance cover to help protect your business should the worst happen.
Elms said that food producers should look to speak to their broker about the cover available as it can vary.
“It really depends what is being produced,” Elms continued.