PHILADELPHIA--(BUSINESS WIRE)--ACE Group today announced the release of a new white paper, “Product Recall Insurance: Five Reasons Why Companies Should Strongly Consider Its Purchase,” exploring the need for and benefits of product recall insurance policies for many businesses. The white paper, authored by Florian Beerli, Senior Vice President, Product Recall Underwriting, ACE Westchester, discusses the various factors that lead to a product recall, the adverse effects of a product recall incident, and why some companies have not yet insured themselves against these incidents – and the reasons they should.
“The aggregate total of all the varied expenses surrounding product recall, including the actual cost of pulling the item out of the stream of commerce, the interruption of regular business, the loss of profits and brand equity, and the media relations and legal fees is significant,” said Mr. Beerli. “Companies that do not already have product recall coverage should strongly consider investing in this as a first line of defense for their economic and reputational well-being.”
Studies have shown that when a company recalls a product there may be a significant adverse impact on its financial performance, not to mention the damage to its overall brand.
In addition to examining the costliness of a product recall incident, the report explains the psychological factors behind why companies mistakenly believe a product recall incident will not affect their organization. Added Mr. Beerli: “Even companies with the best safety records, manufacturing and operational controls are not immune to the risk of a product recall, in part because of the unavoidable risk of human error.”
Furthermore, the rise in government oversight of consumer products in recent years because of new legislation, such as the Consumer Product Safety Improvement Act of 2008 and the U.S. Food and Drug Administration’s Food Safety Modernization Act of 2011, mandating the highest standards of product safety and security is another reason for companies to purchase product recall insurance.
To access the report, please visit our website. The material presented in this report is not intended to provide legal or other expert advice. It is presented for informational purposes only. Readers should consult legal counsel or other experts, as applicable, with any specific questions they may have.
ACE Westchester is the wholesale-focused business of ACE Group, which is one of the world’s largest multiline property and casualty insurers. With operations in 54 countries, ACE provides commercial and personal property and casualty insurance, personal accident supplemental health insurance, reinsurance, and life insurance to a diverse group of clients. ACE Limited, the parent company of the ACE Group, is listed on the New York Stock Exchange (NYSE: ACE) and is a component of the S&P 500 index. Additional information can be found at www.acegroup.com or follow ACE on Twitter by visiting https://twitter.com/ACE_GroupNA.