About Product Recall Insurance

Responses to Recalls

It is necessary to take measures depending on the scale of the recall.

Voluntary recalls, individual claim and so on that occur at a certain rate for products regularly supplied can be taken as a business risk and are a risk that should be handled by budgeting a certain percentage of sales revenues.

In the case of small to medium recalls that occur once every several years to several decades regarding which a certain degree of financial impact cannot be avoided should be handled through risk hedging with insurance if possible.

Preventive measures and crisis management measures should be taken regarding massive recalls that should not be allowed to occur but can have a major impact on finances and can influence management if such a recall occurs. It is said that the insurance market cannot fully meet the needs for risk hedging against massive recalls through insurance, and consequently, in many instances risks are retained from the perspective of cost-effectiveness.