AIG's American International Companies Offer Product Recall Insurance

American International Companies have introduced RecallResponse, a product-recall insurance policy that provides coverage for first-party recall expenses and third-party liability.

RecallResponse covers an insured's recall expenses related to the notification of the incident, product shipping, disposal of the product, rental of warehousing/storage space, the hiring of additional personnel and payment of overtime to current employees. Additionally, coverage can be endorsed to cover the cost of repair, replacement or refund of the product. Insureds may also choose third-party liability coverage, which covers certain third-party compensatory damages claims resulting from an insured product recall. It is available as a coverage part to a commercial general liability policy or as a stand-alone policy.

The policy covers product recall incidents in which the use or consumption of an insured's product has resulted in bodily injury or property damage or poses an actual and imminent danger of resulting in bodily injury or property damage. Coverage is triggered by the earlier of the initial oral or written publication of the product recall, or the insured's initial notice to the insurer. Either event must take place during the policy period.

The RecallResponse policy provides separate limits of liability for product recall expenses (up to $5 million) and third-party liability coverage (up to $10 million).