Why sports equipment manufacturers need product recall insurance
Manufacturers and suppliers of sports and outdoor equipment have faced a number of incidents recently. In these situations, the products were recalled due to faults, some of them a danger to health.
Without Product Recall insurance, manufacturers and wholesalers are faced with the cost of tracing the products, recalling and replacing them. This in addition to being out of pocket for lost sales and potentially faced with a PR crisis.
What is Product Recall Insurance?
Product Recall insurance is designed to cover a wide range of costs that can arise if a product the policyholder manufactures, supplies or sells is at risk of being dangerous. This could be due to design or manufacturing error, contamination, malicious tampering or changes in legislation.
The policy will provide crisis management experts to assist with dealing with what could be an extremely complex and sensitive situation, as well as covering many of the costs.
What is Product Guarantee Insurance?
This is similar to product recall insurance. However, it also covers recall and costs if the product is not actually dangerous but has another fault, ie it is not manufactured or designed correctly.
Why is product recall important for sports equipment manufacturers & suppliers?
Think about the potential consequences if:
- An item of climbing equipment is manufactured using the incorrect process
- energy bar labelling fails to show it contains nuts
- a jacket is treated with a chemical that causes skin complaints
- the fabric supplied to manufacture your tents is not fire retardant
- a disgruntled employee has threatened to put razor blades in gloves and pockets
- the paint on your water bottles turns out to be toxic, etc.