ICOB (Chapter 5) requirement that the retail customer should receive key information before the contract is concluded. Retail customers must also have up to date information in the event of changes to policy terms, conditions or the premium. There is also a requirement for product disclosure for commercial customers at the point of sale and renewal. Disclosure for packaged products is covered in ICOB (Chapter 6).

Indemnifies the insured for a proportion of loss due to the payment of extortion demands or for recalling a threatened or contaminated product or destroying such a product.

Covers the insured’s legal liability to replace, rework or recover products that have failed to perform their intended function after delivery to a customer. The policy is claims-made with co-insurance as standard, and product recall as an option. The policy may back up the insured’s written guarantee to his customer for a one-off product such as chemical plant or be used to support a guarantee of a company’s products (e.g. wall ties).

Exclusion of liability arising from ‘products’ supplied by the insured. This can appear both in public liability and professional indemnity policies. The risk is insured under a products liability policy. The dividing line between the products and public liability policies is important. In the public liability policy the exclusion does not apply to products still in the insured’s custody and control.

A product liability exclusion of the cost incurred by the insured in recalling injurious products from customers and distributors. The costs are insurable under product recall insurance. See also PRODUCT RECALL PLAN.

An ‘extra expense’ cover indemnifying the insured for costs incurred in recalling a product suspected of being injurious to customers and users. Recall costs include communications, transport, warehousing, inspection, overtime, even destruction and so on. Cover is triggered by the decision of the insured to recall the product because of its potentially harmful nature. Cover applies to accidental causes not design faults. Companies should maintain a product recall plan.
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Insurance which indemnifies the insured for the cost of recalling products known or suspected to be defective.

A manufacturer’s plan to enable him to action a product recall situation immediately on becoming aware that it is necessary or prudent to withdraw a dangerous product. Tracing, identifying and handling products need to be pre-planned to minimise cost and risk. The plan is a vital risk management tool.

Protects manufacturers who are the victims of product contamination or the threat thereof. The insurance pays the cost of stock destruction, business interruption and product rehabilitation. There is no cover for third party injury (see PRODUCT LIABILITY INSURANCE) or extortion payments (see PRODUCT EXTORTION INSURANCE). Consultancy services are usually available through the insurer. Food manufacturers and leading retailers are the most likely victims.

Professionals who provide trustee services as a business.