Product Recall Fact Sheet, Australia

Chubb Product Recall “The Product Insurance worth Remembering”

Most companies insure themselves 3. A shampoo manufacturer’s against costly product liability lawsuits, product was recalled by the Food but are less prepared to face the and Drug Administration after expenses of recalling a potentially it was linked to eye infections defective product. Don’t let one incident in several users. take away what took years to build. The manufacturer launched a costly recall program that spanned several General liability policies aren’t designed states to regain control of its product to pay many of the expenses which to ensure there are no further issues. can be associated with product recall, including recall communications, product retrieval and disposal. How can the risk be managed?

Consider the following scenarios: A fast and effective recall strategy can provide a company with the opportunity 1. A cereal food manufacturer to reinforce their commitment to discovers an undeclared allergen safety, quality, and service. It can be but did not discover the error an effective means of mitigating risk until after the product was sent by facilitating the prompt removal to retailers. of defective products from the The manufacturer incurred significant marketplace. costs to communicate the recall, retrieve the product and dispose Key elements critical to success include: of the contaminated goods. • Decision making, notification and 2. A wine company was notified advertising; that a wine bottled at its facility • Recall strategy and traceability; has been returned due to glass • Retrieval and disposal of the chards found in bottles of by product; and numerous customers. • Reporting on the progress of a recall. To minimize the potential for further damage or injury, the company In contrast, a poorly managed recall can implemented an extensive plan to lead to adverse publicity and significant communicate the issue to customers brand damage with the potential across the country and arrange for for significant long term impact on the return of the defective products. profitability and brand reputation. The product safety recall system that a • Advice on industry trends, emerging About Chubb in Australia supplier has in place should be tailored risks and risk benchmarking against to its own specific products and the global best practice; Chubb is the world’s largest publicly severity of the risk those products • Experienced Crisis Management traded property and casualty pose to consumers. Consultants are available to assist; and insurer. Chubb, via acquisitions by • In-country claims staff with the its predecessor companies, has been Whether your customer is a expertise and experience to handle present in Australia for 100 years. manufacturer of component parts, claims effectively. Its operation in Australia (Chubb a distributor of appliances or a food Insurance Australia Limited) provides and beverage company, Chubb has specialised and customised coverages the experience and the expertise to Submission Requirements: including Business Package, Marine, understand the essential issues that Property, Liability, Energy, Professional can affect your business in relation • Chubb Product Liability Proposal Indemnity, Directors & Officers, to product recall. form and supporting documents Financial Lines, Utilities as well as • Copy of Recall and Traceability Accident & Health, to a broad client Program base, including many of the country’s Benefits of a Chubb Product • Copy of Quality Control Manual largest companies. Chubb also serves Recall Policy (incl. Standard Operating Procedures/ successful individuals with substantial Sanitation Standard assets to protect and individuals • Underwriting Expertise comprising • Operating Procedures and Good purchasing travel and personal accident highly skilled and experienced Manufacturing Practice) insurance. specialists with coverage crafted to • Copy of Hazard Analyses & Critical meet the insured’s needs; Control Points More information can be found at • The support of more than 400 • 5 year Loss History www.chubb.com/au. risk engineers worldwide with extensive technical, industry and business expertise to help companies Contact Us anticipate and minimise costly exposures; Chubb Insurance Australia Limited • A collaborative approach to assisting ABN: 23 001 642 020 AFSL: 239687 the insured with the control and management of risk; Grosvenor Place Level 38, 225 George Street Sydney NSW 2000 Product Recall Coverage Comparison: O +61 2 9335 3200 F +61 2 9335 3411 Coverage Typical General Chubb Product www.chubb.com/au Liability Product Recall** Recall Extension Chubb Product Recall – Australia E [email protected] Recall Costs Government Website: Public Extortion www.productsafety.gov.au/recalls/ Loss of Gross Profits guidance-for-suppliers

Replacement Costs

Rehabilitation Expense (Sub Limit)

Defence Costs

Customer Rehabilitation Costs

Adverse Publicity

** Chubb Product Recall is only written in conjunction with a General Liability policy. It is not offered as a stand-alone product.