Product Contamination

Category: Crisis Management
Group: Specialty Group

For companies of all sizes, product contamination is a loss exposure that cannot be ignored. Contamination, whether the result of mislabeling, supplier issues, pathogens, foreign objects, or simple human error within the manufacturing process, is occuring more frequently in the U.S. and around the world. Companies that fall victim to these types of incidents often incur significant costs in crisis expenses, product value, and in the restoration of profits and brand reputation.

Highlights

Malicious product tampering
Accidental product contamination
Adverse publicity
Intentionally impaired ingredients
Government recall
Capacity of up to US $10 million
Excess capacity up to US $20 million (minimum attachment point 10M in underlying limits)

Target Insureds

Food and beverage / nutraceutical industry:

Manufacturers / processors
Retailers
Wholesalers
Distributors
Importers

Summary of Coverage

Our policy is designed to provide critical coverages for contamination incidents and related exposures not contemplated under the scope of traditional general liability or product extortion insurance. Because we specialize in small to medium size food and beverage risks with sales of up to US $650 million, we can provide a customized policy that addresses the needs of the mid-market segment.

The policy offers business interruption coverage back to pre-incident sales and also covers brand name rehabilitation costs. Numerous other additional expenses are covered, including recall costs, incident expenses and crisis management advice.

Standard coverages:

First party and customer recall-related expenses, including but not limited to, laboratory analysis, transportation, radio, internet and television announcements, and third-party recall expenses
Loss of gross profit for a period of up to 18 months
Rehabilitation expenses
Value of contaminated products
Crisis response and consultant expenses, including public relations and recall consultants
Pre-Recall and Pre-Contamination Expenses
Unsubstantiated Retailer Costs
Increased cost of working
Extortion costs
Government recall, Intentionally Impaired Ingredients and Adverse Publicity at full policy limits
No self insured retention applying to crisis consultant expenses or extortion costs

Optional coverages / services:

Government determination (enhanced)
Comprehensive product refusal
Customer loss of gross profit for a period of up to 18 months
Third party expense indemnity
Customer rehabilitation
Forensic Accounting and Claims Services
Multi-year policy periods available for select risks at a discounted rate
No self insured retention applying to crisis consultant expenses or extortion costs
Up to 10% of the Gross Written Premium can be used for preventative services provided by Sedgwick brand protection

crisis response by sedwick brand protection

If managed poorly, a recall or contamination event can have devastating consequences on a company’s reputation and bottom line. Sedgwick complements the policy coverages and are available to our policyholders to provide pre- and post- recall management and consulting services 24/7. Having handled over 5,000 recalls for their clients Sedgwick is a market leader in the recall space and can not only coordinate but also execute a recall for our policyholders. Sedgwick’s services are even available for pre-incident planning and prevention and our policyholders can utilize up to 10% of the policy premium to engage their services.

Restaurant Recovery

Restaurant recovery insurance offers business interruption coverage from foodborne illness, accidental contamination, malicious contamination or product extortion.

Product Liability

Tokio Marine HCC insures product manufacturers and distributors with a broad spectrum of exposures.

Why Tokio Marine HCC?

Tokio Marine HCC is a leading specialty insurance group with offices in the United States, Mexico, the United Kingdom and Europe, transacting business in approximately 180 countries and underwriting more than 100 classes of specialty insurance. Our products and capabilities set the standard for the industry, and many of our almost 3,000 employees are industry-leading experts. Each of our highly entrepreneurial businesses are equipped to underwrite special situations, companies and individuals, and acts autonomously to deliver effective solutions.