25
Oct
2012

As Demand For Recall Policies Surges, Coverage Obstacles Lurk

Law360

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A recent wave of high-profile food recalls have sent more companies running to insurers for product recall coverage, but the few court disputes over these special policies have already revealed ways carriers can swipe coverage from policyholders, attorneys say.

Robert Chesler, an Anderson Kill & Olick PC policyholder attorney, said he'd seen a jump in the number of middle-market companies taking out recall coverage within the past few years. Food processors, distributors and wholesalers are all seeking out these policies, he said.

"Companies are far more careful about recalls and more likely to have recalls if there's any suspicion," Chesler said. "Fear of the FDA knocking on your door is great enough to maintain the market for these insurance products."

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