Product Recall Insurance Cost
How much does product recall insurance cost, and how is that price determined? We answer both of those questions (and more) so you can purchase your coverage with confidence. No hidden fees, no surprises.
How Much Does Product Recall Insurance Cost?
Product recall insurance from Food Liability Insurance Program (FLIP) starts as low as $109 a year. We offer two different aggregate limit (the total amount your policy will cover in a year) options to choose from, which affect the starting price.
- $10,000 aggregate limit = $109/yr.
- $25,000 aggregate limit = $129/yr.
This coverage is available as an add-on to our standard food liability insurance policy, which includes general and product liability coverage, starting at $25.92 per month or $299 per year.
What Factors Affect Food Recall Insurance Cost?
The cost of your food recall insurance policy depends on which insurance limits you select.
Our $10,000 aggregate option starts at $109 a year, but if you need our higher $25,000 aggregate limit, the starting cost is $129 a year.
Which Limit Is Best for My Business?
Consider the following to determine which of our two limit options to choose:
- Potential recall costs: Estimate how much it would cost if you had to recall one of your products, including collection, disposal, notifying customers, and lost revenue
- Contractual requirements: Retailers and vendors may have a minimum product recall limit you need to meet
- Supply chain and distribution: A business that only distributes products to a small, local market typically needs lower limits than one that distributes to multiple states
Can I Reduce the Cost of My Product Recall Insurance?
Although we can’t offer a lower premium than the starting prices shown above, you can keep your costs down with a strong risk management strategy.
Accidents still happen, even with the best preventative measures, which is why insurance is so critical. However, you can avoid many potential disasters by:
- Thoroughly vet and audit your suppliers to ensure they follow strict safety standards
- Conduct quality checks at each stage of production
- Closely monitor customer complaints for early warning signs of a possible product issue
- Maintain a digital record to trace and track all products throughout production and beyond
- Encourage employees to report potential issues as they arise immediately
A history of claims can equal a higher premium. Each of these risk mitigation measures lowers the chance of a recall happening. That means a lower likelihood you’ll need to file a claim (and more savings for you).
Product Recall vs. Product Liability Insurance
Despite their similar names, product recall and product liability insurance are not the same coverage. They cover different claims stemming from your food or beverage product, and both are essential for most food businesses.
| Product Recall Insurance | Product Liability Insurance | |
|---|---|---|
|
What It Does |
Covers the financial losses you face after recalling a defective, contaminated, or otherwise dangerous product |
Covers your legal liability if your food or beverage product hurts someone or damages their property |
|
What Triggers Coverage |
A safety concern (e.g., defective packaging or contamination) that causes you to recall your product (voluntarily or involuntarily) |
When a customer or other third party files an injury or property damage claim against you |
|
What It Pays For |
|
|
|
Example |
You discover a batch of your product was sold without the proper allergen labeling, and you need to recall all affected products
|
A customer claims your product made them sick because it contained Salmonella bacteria and sues you
|
|
Key Exclusions |
|
|
|
Included in a Base FLIP Policy? |
❌
(available as an add-on coverage)
|
✅ |
Learn more about what product recall insurance is and how it safeguards your business.
Why FLIP for Product Recall Insurance?
At FLIP, we take quality coverage and your experience seriously. Discover the perks you’ll enjoy with a policy designed around your needs.
Catered to Food Businesses
100% Online Application
Instant Certificate of Insurance
Top-Rated Coverage
Easy Bundling
Monthly and Annual Payment Options
How Do I Get a Quote?
Get your product recall insurance quote in 10 minutes or less with our online application! Simply follow these steps:
2. Choose your business activities
3. Fill out the required information
4. Select “Yes” for optional product recall coverage
5. Get your free quote and finish checking out!
FAQs About the Cost of Food Product Recall Insurance
What Product Recall Limits Do Small Food/Beverage Businesses Usually Choose?
Smaller food businesses (e.g., farmers market vendors or new food brands) typically select aggregate product recall limits ranging from $10,000–$25,000.
Larger brands may face national recalls and need higher limits ranging into the millions. However, small to mid-sized businesses generally face localized recalls, so these lower limits allow them to get the coverage they need without overpaying.
Will Product Recall Insurance Cover Food Spoilage?
No, product recall insurance isn’t designed to cover food spoilage. If your product spoils because of a freezer failure or power outage, tools and equipment (inland marine) or commercial property insurance could cover that cost.
Does FLIP’s Policy Cover Retailer Chargebacks?
No, retailer chargebacks (e.g., fines or penalties the retailer asks you to pay when you pull your product from their shelves) are not covered by FLIP’s policy.
Is Product Recall Coverage Included in a Base FLIP Policy?
No, it is only available as an optional add-on coverage, but it can be easily bundled with your FLIP general liability policy at checkout. If you already have a general liability policy from us, you can add product recall insurance via your online account.
Will This Policy Cover Allergen Mislabeling Recalls?
Yes, recalls due to labeling errors are covered under FLIP’s product recall insurance policy.
Are Voluntary and Involuntary Recalls Covered?
Yes, both types of recalls are covered. Voluntary recalls occur when you decide to pull a product out of the market, while an involuntary recall is one you are ordered to conduct by a regulatory agency like the Food and Drug Administration.
Reviewed by: Kyle Jude
Kyle Jude is the Program Manager for Food Liability Insurance Program (FLIP). As a dedicated program manager with 10+ years of experience in the insurance industry, Kyle offers insight into different coverages for food and beverage business professionals who are looking to navigate business liability insurance.