AIG subsidiary Lexington Insurance Company has launched RecallResponse, a new supplementary product that provides coverage for first-party expenses and third-party liability arising from the recall of finished or component goods.
RecallResponse can cover product recall expenses alone or can be expanded to cover liability to third parties arising from the recall. Insurable expenses can include the costs of notifying customers, shipping and disposing of a recalled product, repairing and replacing the product, and refunding customer payments.
Expenses associated with extra warehousing and extra personnel to support a recall can be insured as well and coverage can be extended worldwide. Ultimately the policy is intended to offer supplementary support to Lexington’s product liability insurance.
Whether a recall is voluntary or involuntary, it can be extremely costly for a company, said Kevin Kelley, chairman and CEO of Lexington Insurance. RecallResponse arms our product liability policyholders with the insurance they need to address the multiple facets of this exposure.