Product Recall Insurance

AAA

DEFINITION of 'Product Recall Insurance'

Insurance that covers expenses associated with recalling a product from the market. Product recall insurance is typically purchased by manufacturers such as food and beverage, toy and electronics companies to cover costs such as customer notification, shipping costs and disposal costs. Coverage generally applies to the firm itself, though additional coverage can be purchased to cover the costs of third parties.

INVESTOPEDIA EXPLAINS 'Product Recall Insurance'

Product recalls can be involuntary (required by a regulatory agency or the government) or voluntary (the manufacturer notices a defect that is unlikely to force an involuntary recall), and can be costly. Some product types are generally not covered under product recall insurance, such as automobiles and related products, explosives and tobacco.

RELATED TERMS
  1. Commercial Property Insurance

    Insurance that is used to cover any type of commercial property. ...
  2. Commercial Multiple Peril Policy

    A commercial insurance policy that offers at least two forms ...
  3. Commercial Property Floater

    A specific type of floater that is attached to an insurance policy. ...
  4. Business Crime Insurance

    An insurance policy that companies purchase to ensure protection ...
  5. Liability

    A company's legal debts or obligations that arise during the ...
  6. Insurance

    A contract (policy) in which an individual or entity receives ...
Related Articles
  1. Don't Get Sued: 5 Tips To Protect Your ...
    Entrepreneurship

    Don't Get Sued: 5 Tips To Protect Your ...

  2. Cover Your Company With Liability Insurance
    Home & Auto

    Cover Your Company With Liability Insurance

  3. Consumer Confidence: A Killer Statistic
    Retirement

    Consumer Confidence: A Killer Statistic

  4. Investing In Medical Equipment Companies
    Options & Futures

    Investing In Medical Equipment Companies

comments powered by Disqus
Hot Definitions
  1. Elasticity

    A measure of a variable's sensitivity to a change in another variable. In economics, elasticity refers the degree to which ...
  2. Tangible Common Equity - TCE

    A measure of a company's capital, which is used to evaluate a financial institution's ability to deal with potential losses. ...
  3. Yield To Maturity (YTM)

    The rate of return anticipated on a bond if held until the maturity date. YTM is considered a long-term bond yield expressed ...
  4. Net Present Value Of Growth Opportunities - NPVGO

    A calculation of the net present value of all future cash flows involved with an additional acquisition, or potential acquisition. ...
  5. Gresham's Law

    A monetary principle stating that "bad money drives out good." In currency valuation, Gresham's Law states that if a new ...
  6. Limit-On-Open Order - LOO

    A type of limit order to buy or sell shares at the market open if the market price meets the limit condition. This type of ...
Trading Center