In recent years, product recalls have become increasingly frequent occurrences.
For example, in September 2014, the Consumer Product and Safety Commission issued 25 product recalls, one for nearly every day of the month, and data from the Food and Drug Administration shows a surge in product recalls reported this year.
For small businesses, recalls can cause serious financial and reputational risks. But for many, accessing sufficient coverage through existing market offerings can be difficult—or even impossible.
Recognizing the market need, ACE Westchester this week introduced ACE Recall Plus for Small Businesses, a new policy area offering customized product recall coverage for small businesses.
The coverage is available to companies with revenues up to $25 million, and allows policyholders to select coverage based on their needs and obligations. The coverage will protect client's balance sheets by offering reimbursements for covered financial losses resulting from a recall, as well as advisory services to help small businesses respond quickly and effectively to protect their brand's name and reputation.
"Product recalls can be complex and expensive for any business, particularly for a small business, and product recalls are more costly now than ever before," said Florian Beerli, senior vice president of ACE Westchester Product Recall. "While it takes years for a business to develop its brand reputation, it can take only moments for that reputation to be tarnished."
He added, "For a small business, a product recall incident can be devastating, causing financial disaster and potentially forcing a business to close its doors, but until now current market offerings made it difficult for small businesses to buy standalone product recall coverage."
ACE Recall Plus for Small Businesses offers three distinct insurance policies:
- Component Parts: Reimburses the financial loss from a covered insured event resulting from the use of component parts in the general manufacturing, electronic, medical device, automotive and aviation industry.
- Consumable Products: Reimburses the financial loss resulting from a covered insured event in the food and beverage, cosmetics and pharmaceuticals industries.
- Consumer Goods: Reimburses the financial loss resulting from a covered insured event in the areas of appliances, electronics/electrical, clothes, furniture, household goods, children's products, outdoor goods and products, sports/exercise equipment and products.
With the coverage, small business policyholders will have access to product recall consultants on a pre- and post-incident basis.
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