Interest in Product Recall and Liability insurance is rising among companies in the U.S., especially as supply chains grow ever more global, thereby exponentially increasing exposures to manufacturing and distribution problems.
Also driving buying decisions: businesses endeavoring to comply with a rash of recent federal regulations; and a desire to protect their brands from the sort of reputational damage from which there can be no return.
“We are seeing an increase in the number of policies that we're writing and placing both on the food and non-food sides,” says Bernie Steves, managing director in crisis management for Aon Risk Solution's Chicago office.
Here's a look at nine recent recalls—mini-case studies of just how much can go wrong for manufacturers and food processors.
Death and injuries force recall: In May, Wal-Mart Stores Inc. and Toys “R” Us Inc. recalled some 21,000 inflatable Banzai water slides for in-ground pools after one woman died from a fractured neck and two people reported neck fractures, including a man who was paralyzed. All three injuries resulted from victims hitting their heads on a hard surface at the bottom of the slide because it had partially deflated.
Ford lawsuit on product liability: In March the Ford Motor Co. was sued for allegedly selling trucks that the company knew had defective fuel tank linings for 10 years while concealing this issue from consumers.
Salmonella lawsuit: In April, two women from Wisconsin filed suit against Moon Marine U.S.A. Corp. for sushi they say was tainted with salmonella from “Nakaochi Scrape,” frozen back meat that is shaved from fish bones, which ended up in about 60,000 pounds of ground yellowfin tuna.
Dog food lawsuit: In June, several consumers filed a class-action product-liability lawsuit against Diamond Pet Foods Inc. and Costco Wholesale Corp. over dog food allegedly contaminated with salmonella, which caused both dogs and dog owners to become sick.
Toddler toy recall: In May, Toys “R” Us recalled some 24,000 units of the Imaginarium 5-Sided Activity Center, sold exclusively through the chain, due to a possible choking hazard related to removable wooden knobs on the toy's xylophone keys. Units sold for about $25.
Blender recall: In May, Select Brands Inc. of Lenexa, Kan. recalled some 4,069 units of its Kitcen Selectives 6-Speed Blenders, model BL-15, for a possible laceration hazard. No injuries had been reported.
Impact hazard: In December, Pottery Barn Kids, a division of Williams-Sonoma Inc. of San Francisco, recalled some 7,700 children's canopy beds in the United States and Canada due to 33 reported injuries from collapsing canopies.
Choking hazard: In December, Build-A-Bear Workshops Inc. of St. Louis, Mo. recalled some 284,000 Colorful Hearts Teddy Bears after discovering the bear's plastic eyes could come loose, posing a choking hazard for young children.
Lead paint hazard: In December, Target Corp. of Minneapolis recalled some 139,000 Circo 17-inch Children's Travel Cases after discovering the surface coating onthe cases contained excessive levels of lead.
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