Product Recall Not Covered By Insurance

It was recently announced that ConAgra would have to spend up to $60 million to recall Peter Pan Peanut Butter due to the recent salmonella outbreak that affected almost 300 people.

Without commenting on ConAgra’s insurance, this is a good time to point out that product recall expenses are not covered by 99.9% of all product liability insurance policies.

General liability insurance includes product liability (for most insurance buyers). The policy will pay for the liability resulting from bodily injury and property damage from contaminated products. The policy will not cover the expense of recalling suspected or actually tainted products.

Some insurance companies do offer recall coverage – either as an addition to the general liability policy or as a stand-alone policy. It is, however, a rarely purchased coverage.