Is Product Recall Insurance Needed In Food Industry?

A recent article at Food Quality News indicated that although the automotive industry originated the need for product recall insurance, the food industry is under close scrutiny today, according to one insurance agency. President and Founder of Schaefer Enterprises, Inc. Greg Schaefer said that in the food industry, supermarkets often believe that because they are not the creators of food products, but only sell them, a recall is not their problem. In truth, however, a recall becomes everyone’s problem who is involved, from the manufacturer to the end consumer.

Schaefer Enterprises, Inc. (SEI) provides insurance for restaurants, grocers, supermarkets, wholesale distributors, and manufacturers according to the article. Schaefer revealed that many firms believe having product liability coverage in the event of a recall is sufficient. However, product liability coverage is for companies who actually manufacture products and provides protection against damages that may result from a defective or faulty product such as settlements, cost of judgments, and legal fees.

Today, more and more retail supermarkets are preparing their own food products on premises, such as those seen in stores’ own delicatessens. Big brand stores understand the need for product recall insurance, however Schaefer said it is often necessary to explain to smaller food stores where the risk lies, and why coverage is necessary.

Ultimately, big and small food stores must consider the product, whether it could potentially harm someone, what risks come with the product, and its history in terms of recalls, food poisoning, etc. Those in the food industry, particularly those who prepare sandwiches, potato salads, pizzas, and other food products on premises, should consider product recall insurance.

At REA JET, we know that product recalls have unfortunately become more and more frequent in recent years, whether those recalls pertain to automobiles with potential safety hazards, or food products containing allergens or bacteria that can result in food poisoning. While product recall insurance may be a good idea, the right industrial coding and marking solution is also essential for efficient recalls and traceability in the supply chain. Contact us today for all of your industrial coding needs.