AIG offers coverage for product recalls

Rough Notes, Jul 1999

American International Underwriters (AIU), part of American

International Group (AIG) introduced a policy covering product recall expenses of consumer product manufacturers. The product, called Crisis Recall, is designed for manufacturers of finished products, such as consumer durables, white goods, children's products and toys, clothing, office equipment and sporting goods.

Crisis Recall is available worldwide with liability limits up to $10 million. The policy places strong emphasis on pre-incident planning.

The United States Consumer Product Safety Commission recalled 362 products affecting over 67.5 million units in 1997.

Among the product recall expenses covered by Crisis Recall are: communication; transportation; warehousing; overtime and expenses for employees; product disposal; costs to replace or restore the recalled product; redistribution of a recalled or restored product; and costs to replace a recalled product that has been destroyed, is unfit for sale, or unfit for its original use with a different product of similar value.

Crisis Recall also covers the fees of an international crisis management and investigative consulting firm, as well as a public relations firm for services related to the recall. No deductible applies to the consultant costs.

Crisis Recall is offered through AIU's Crisis Management Division, which also provides contaminated products insurance and kidnap and ransom/extortion coverage.

More information on Crisis Recall is available in the U.S. by calling (800) 950-8773 or (212) 770-2704.