When Do Product Recalls Happen?

Product recalls occur as a result of safety or quality concerns related to a manufacturing or design defect in a product that may harm its users. Recalls may negatively affect a company's stock as they are expensive and can damage a firm's reputation, leading to declining sales.

When should a product be recalled?

A product recall may be required if goods have been supplied that will or may cause injury to any person or contravene an unsafe goods notice or prescribed product safety standard.

What triggers a product recall?

Product recall insurance is triggered when a product poses severe health risks and/or death to users of the product. The risks of product recalls have increased over the years due to more stringent global regulatory rules and safety requirements.