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Product recall insurance, a 'must have' for food production firms

Published 31 January 2019

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, says 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 says 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 says.

“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.”

Stephen Elms, National Head of Food Production at Gallagher

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

How product recall insurance protects food producers

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.”

Talk to our experienced food production insurance experts

Specialised industry knowledge means a food production insurance expert can identify the potential risks presented by the processes involved as well as the roll-on effects, such as the need for product recall, and collateral damage, to reputation, for example, and formulate a risk management and insurance cover program accordingly.


Our team of food production specialists calls on the Gallagher legacy of 75+ years in servicing food production enterprises, which means that whether you are a primary producer, in processing, transit or grocery wholesaling, we have deep understanding of the risks associated with each step of the supply chain and how to manage and mitigate them. 

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Further reading

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Gallagher provides insurance, risk management and benefits consulting services for clients in response to both known and unknown risk exposures. When providing analysis and recommendations regarding potential insurance coverage, potential claims and/or operational strategy in response to national emergencies (including health crises), we do so from an insurance and/or risk management perspective, and offer broad information about risk mitigation, loss control strategy and potential claim exposures. We have prepared this commentary and other news alerts for general information purposes only and the material is not intended to be, nor should it be interpreted as, legal or client-specific risk management advice. General insurance descriptions contained herein do not include complete insurance policy definitions, terms and/or conditions, and should not be relied on for coverage interpretation. The information may not include current governmental or insurance developments, is provided without knowledge of the individual recipient’s industry or specific business or coverage circumstances, and in no way reflects or promises to provide insurance coverage outcomes that only insurance carriers’ control.

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