Product Recall Insurance
Recalls are a common and costly risk for anyone running a food or beverage business. Discover how product recall insurance from Food Liability Insurance Program (FLIP) covers associated expenses and how you can get insured online today.
What Is Product Recall Insurance?
Food product recall insurance is a type of coverage designed to cover the expenses your business could face if you voluntarily or involuntarily recall a product over concerns regarding its safety or quality.
Voluntary vs. Involuntary Product Recalls
There are two types of product recalls:
- Voluntary: When you decide to recall a product, even though it isn’t legally required, to protect your customers or address a safety concern
- Involuntary: When a government regulating agency forces you to recall one of your products because it determines the product poses a risk to customers
Product recall insurance can cover the costs associated with managing both voluntary and involuntary recalls.
What Does Product Recall Insurance Cover?
This policy can cover costs stemming from voluntary and involuntary recalls, such as expenses you face while:
- Investigating product defects
- Collecting recalled products
- Disposing of recalled products
- Hiring a public relations representative or a crisis management team
These expenses include:
- Lost revenue caused directly by a covered recall incident
- Costs exceeding normal business expenses to fix a product issue and restore expected sales
- Legal fees, costs, or expenses connected with investigating, defending, settling, or appealing a claim made against you
What Does Product Recall Insurance Not Cover?
Like any insurance policy, product recall coverage has exclusions. These include:
- Product recalls due to banned substances, carcinogens, or lead
- If you knew about a product’s safety concerns/defectiveness before purchasing a policy from FLIP
- Any recall-related expenses that occurred outside of the policy period
- Your employees’ salaries
- Your overhead costs
Always refer to your policy documents for a full list of exclusions.
Who Needs Product Recall Insurance?
If you make, sell, or distribute food or beverage products, you need this policy to protect your business in the event of a recall. These incidents can be extremely costly and damaging to your business, but a product recall policy can save you from bearing the financial burden.
Don’t see your business listed here? Learn more about the types of businesses FLIP covers.
How Does Product Recall Insurance Coverage Work?
If you have to recall a product, voluntarily or involuntarily, notify FLIP immediately. Your product recall policy can cover the costs you face throughout this process as a result of covered incidents, like the expense of examining your product to check for defects or hazards.
It can also help you manage and quickly respond to a recall by providing necessary financial support for public relations (PR) efforts, like press releases and media outreach, as well as replacements or refunds for affected customers. These efforts help mitigate reputational damage for your business by building public trust and reducing negative publicity.
What Are Common Product Recall Claims for Food Businesses?
Some of the most common food product recall claims include:
- Defective packaging
- Food contamination
- Foodborne illnesses
- Foreign objects in food
- Improper storage or handling
- Incorrect labeling/advertising errors
- Unlabeled allergens
How Much Does Product Recall Insurance Cost?
You can get a product recall policy from FLIP for as low as $109 per year. The following factors can affect the price of your premium:
- The limits you select
- $10,000 aggregate limit = starts at $109/year
- $25,000 aggregate limit = starts at $129/year
- Your business’ gross annual revenue
- Your claims history
- Your business’ location
Why FLIP for Product Recall Insurance?
At FLIP, we make it easier than ever to get this essential coverage with our 100% online application. You never have to speak to an agent, unless you want to! Simply complete a product recall insurance application and get your free quote in minutes.
Our commitment to offering convenient, comprehensive coverage at an affordable price means you never have to choose between saving money and safeguarding your business from the financial impact of claims.
FLIP Customer Testimonials
Here’s what other food and beverage entrepreneurs say about FLIP from over 350+ reviews.
Coverage Details
$10,000 Aggregate Limit
$0 Deductible
$25,000 Aggregate Limit
$0 Deductible
- Recalls are expensive: Most small to mid-sized businesses are not equipped to pay for recall management out of pocket. That means you may be forced to close your business in the event of a recall if you don’t have insurance.
- Recalls are common: The U.S. issued 296 forced food recalls in 2024, with unlabeled allergens, Listeria, and Salmonella being the three most common reasons behind these incidents.
- Recalls are time-consuming: Managing a recall involves many steps, from notifying customers to collecting the product to notifying the media and beyond. This can take time away from your ability to manage your business.
Product liability helps cover the cost of lawsuits over third-party bodily injury and property damage claims caused by your food or beverage products. It doesn’t offer any reimbursement for the expenses you face handling a product recall.
If a customer has an allergic reaction to your granola bars and sues you, product liability could cover the expenses associated with this claim (legal fees, medical bills, etc.). Meanwhile, your recall insurance could cover the cost of collecting and destroying these granola bars after you recall them. That’s why it’s so important to have both coverages for your business.
No, product recall coverage is not included in your general liability policy. It is a separate coverage you can purchase alongside your base FLIP general liability policy.
Yes, FLIP’s policy can cover expenses related to international and domestic recalls.