Does Product Liability Insurance Cover a Retailer’s Product Recall Costs?

Short answer: product liability does not necessarily pay the cost of recalling or withdrawing goods. Liability cover may address specified legal liability for injury or property damage, while product recall insurance, if available, is a separate section with its own trigger and exclusions.

Separate a claim from a recall

A retailer may face a complaint, an injury allegation, a regulator’s notice, a supplier alert or a voluntary withdrawal. Those events are not interchangeable under policy wording. Check whether cover requires actual bodily injury or property damage, whether investigation costs are included, and whether recall expenses such as customer communications, transport, sorting or replacement are insured.

Tell the broker what you sell, where products are made, which brands appear on packaging and where customers are located. Keep supplier agreements, batch records, test results, complaint logs and a written escalation process. If goods are imported or sold under your own brand, disclose that role accurately.

Renewal questions

• Are product categories and sales territories current?
• Does the wording cover your role as manufacturer, importer, distributor or retailer?
• Are recall costs insured, and what event triggers the section?
• Are limits, sub-limits, excesses and notification rules practical?

Explore Insure24’s business insurance information and contact the broker with product and supply-chain details. Insure24 is not the insurer; terms depend on the products, declared role and policy wording.

General information only; obtain appropriate product compliance advice for your goods.