Steadfast NSG | Fri ,07 Apr 2017
Australia’s Growing Risk? Product Recall is a class of insurance that is recommended for the majority of importers and manufacturers to cover the risk of losses involved with product contamination, tampering and defects. Products are not focused solely on food items, as we have seen in the increasing trend to import product
from overseas manufacturers of whitegoods, electrical components, clothing and furniture. There is a need to ensure these goods meet Australian Standards and quality control methods must be ongoing.
A case example may arise in which the initial contract is made with an overseas company after careful review and even as far as personal inspections of factories and the product processes. The product is tested and proven compliant and effective to a high standard. Over time these processes / parts may be compromised by the substitution of inferior quality parts and even a change of factory without knowledge of the Australian distributor. If these are trade products and used in the building industry, strict control methods must be at a continued, sustained level.
In food products, the product contamination can range from an incident such as traces of nuts not disclosed to the consumer, to the discovery of metal fragments or foreign matter found in food. The health risks from this discovery would carry subsequent obligations such as recalling the products with appropriate consumer notice and warnings.
Product tampering, often associated with blackmail or purposeful loss of reputation, has been highlighted in the media. Recent cases have involved products such as paracetemol and cakes, creating widespread concern in the community.
There is an insurable risk for the financial losses and costs associated with the recall from shelves and the loss of profit, both to the company directly and also indirectly via its customer base. Recovery of costs associated with the recovery of public opinion and rebuild of reputation as well as costly mass marketing campaigns if required, may also be part of the insurable risk.
If you are currently involved in the importing of goods, under Australian legislation you are deemed to be the manufacturer. It is an important detail to disclose to your broker for both the suitability of coverage and correct premium calculation.
Cover for Product Recall or Product Contamination is advised and you are encouraged to talk to your broker about your circumstances.
from overseas manufacturers of whitegoods, electrical components, clothing and furniture. There is a need to ensure these goods meet Australian Standards and quality control methods must be ongoing.
A case example may arise in which the initial contract is made with an overseas company after careful review and even as far as personal inspections of factories and the product processes. The product is tested and proven compliant and effective to a high standard. Over time these processes / parts may be compromised by the substitution of inferior quality parts and even a change of factory without knowledge of the Australian distributor. If these are trade products and used in the building industry, strict control methods must be at a continued, sustained level.
In food products, the product contamination can range from an incident such as traces of nuts not disclosed to the consumer, to the discovery of metal fragments or foreign matter found in food. The health risks from this discovery would carry subsequent obligations such as recalling the products with appropriate consumer notice and warnings.
Product tampering, often associated with blackmail or purposeful loss of reputation, has been highlighted in the media. Recent cases have involved products such as paracetemol and cakes, creating widespread concern in the community.
There is an insurable risk for the financial losses and costs associated with the recall from shelves and the loss of profit, both to the company directly and also indirectly via its customer base. Recovery of costs associated with the recovery of public opinion and rebuild of reputation as well as costly mass marketing campaigns if required, may also be part of the insurable risk.
If you are currently involved in the importing of goods, under Australian legislation you are deemed to be the manufacturer. It is an important detail to disclose to your broker for both the suitability of coverage and correct premium calculation.
Cover for Product Recall or Product Contamination is advised and you are encouraged to talk to your broker about your circumstances.
