XL Bermuda To Offer Product Recall Insurance
XL Insurance Bermuda Ltd (XLIB) has launched its new Product Contamination policy, which will cover companies for product recalls, including forced and/or government recalls due to various reasons including; accidental or malicious contamination, product extortion and adverse publicity.
Numerous companies have had to recall millions of products due to various reasons. In 2010 alone McDonalds recalled cups due to risks of poisoning from the cups paint, Toyota recalled several million vehicles because of faulty accelerator pedals, Johnson & Johnson recalled 43 over-the-counter children’s medicines, Kellogg issued a voluntary recall of select packagesof cereals and hundreds of millions of eggs were recalled due to a potential salmonella contamination.
XLIB offers clients up to $50 million in limits excess of a $10 million minimum attachment point. XLIB say their new policy has been developed to address the ever evolving regulatory and food safety environment that many North American food and beverage companies face today.
XLIB Chief Casualty Underwriter Beth Piggott said
The launch of our new policy and this seminar come at a critical time. The last few years have seen a significant rise in the frequency of recalls in North America combined with a noticeable increase in the size and scope of the recalls and a corresponding increase in financial severity. These recalls are under growing scrutiny from regulators. The August 18th recall of 380 million eggs in the US is a typical example of this trend.
In addition to the pro-active stance taken by the US Food and Drug Administration we also think it likely that the proposed Food Safety Enhancement Act could pass into law in the relatively near future. This would give regulators authority to mandate recalls and will put food and beverage companies into unchartered waters in terms of the food safety environment in which they are operating. XLIB has been writing Product Contamination business for over ten years and we have used this experience to re-engineer our policy to provide broad and contemporary cover to respond to today’s challenging regulatory environment and the growing capacity needs of companies seeking higher limits.
Patrick Tannock, XLIB President, said:
XLIB has a proven track record of responding to our clients needs with new and enhanced products. When combined with our claims handling expertise we are confident that our new Product Contamination policy will provide solutions and certainty for our clients in an increasingly dynamic landscape.
