Devoted to the Insurance industry and all thing related

There have been two very large top recalls this week from RC2 Corp (RCRC) and Kolcraft of Thomas and Friends toys and playpens.  

Where there is risk you're sure to find some form of insurance to offset that risk. Did you know that companies can purchase recall insurance from some insurers? I was not aware of this type of insurance but after some digging around I found some interesting factoids. From the American Bar Association website:

"Many companies have discovered the hard way that insurance covering general product-liability risk does not usually cover the costs of implementing a recall of an unsafe or contaminated product.

Product-recall insurance policies take the form of extra-expense coverage rather than legal-liability coverage."

Aon (AOC) is just one of the companies offering Product Contamination/Recall Insurance that covers the following and more:

"Recall costs in the event of your own or a third-party recall as well as recalls or sales bans at the direction of public agencies, especially costs for examination, transportation, destruction, analyses, decontamination of plant sites, storage space and cancellation charges, additional storage capacities, installation and dismantling costs, notifications to customers or end users, etc. with the right expert in your country.

Manufactoring costs. Replacement of the recalled goods plus renewed transportation costs for replacement deliveries.

Rehabilitation costs. Advertising measures, sales promotion, re-launch of a product on the market, appropriate expenses to preserve brand integrity."

Companies that sell anything from toys and cars to food and drugs should seriously consider having recall insurance as part of their overall coverage. I wonder if either RC2 Corp or Kolcraft had such coverage?