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Survey Report

Insurance Marketplace Realities 2020 Spring update – Product recall

COVID 19 Coronavirus

May 7, 2020

A business-friendly administration does not necessarily reduce liability. Product recall risk may in some ways be rising.
Rate predictions
  Trend Range
Product recall Neutral increase Flat to +5%

Key takeaway

A business-friendly administration does not necessarily reduce liability. Product recall risk may in some ways be rising.

Product safety is flying a bit under the radar these days, but at a time when many sectors are seeing increases in consumer demands, it’s essential that companies safeguard their production processes.

  • The FDA has decided to temporarily cease supplier verification onsite audits.
  • Manufacturers have less management oversight due to the implementation of teleworking.
  • Many manufacturers are looking to diversify their scope of products to fill gaps in consumer needs caused by the current pandemic, but new products come with new risks. These companies should not let their quality control guard down.

We do not expect the product recall marketplace to be significantly impacted by COVID-19, although much still needs to be learned.

  • Presently, there is no evidence to suggest that COVID-19 is a food-borne pathogen. It’s also unlikely that the virus could withstand the rigors and time frames involved in most food and non-food supply chains.
  • There is, however, no testing available to detect this virus in food products.
  • Environmental contamination is a main concern as details emerge regarding the virus’s ability to survive on contact surfaces for up to three days.

Overall, the number of products recalled has decreased over the past year, although this varies by industry.

  • The food and beverage space has seen a steady pace of recalls, although the average units per recall have decreased. Supply chain ingredient contaminations continue to disrupt the recall market.
  • Watchdog organizations are having greater influence with the Consumer Product Safety Commission. That influence may become further amplified by social media.
  • There has been an uptick in software-related recalls in the durable goods sectors.
  • Airbags continue to give angst to automotive manufacturers.

The recall insurance marketplace appears to be taking a flexible underwriting approach during this chaotic time.

  • While early 2020 was shaping up to be a hardening market, in the early days of the COVID-19 crisis many carriers communicated a willingness to consider clean risks and simplify the data collection process.
  • Having ample time to market renewal submissions is more crucial in this climate.
  • While one major reinsurer has made significant changes to its casualty outlook, they have “doubled down” on their commitment to the recall market.
  • There have been no major changes to capacity. 


Each applicable policy of insurance must be reviewed to determine the extent, if any, of coverage for COVID-19. Coverage may vary depending on the jurisdiction and circumstances. For global client programs it is critical to consider all local operations and how policies may or may not include COVID-19 coverage. The information contained herein is not intended to constitute legal or other professional advice and should not be relied upon in lieu of consultation with your own legal and/or other professional advisors. Some of the information in this publication may be compiled by third party sources we consider to be reliable, however we do not guarantee and are not responsible for the accuracy of such information. We assume no duty in contract, tort, or otherwise in connection with this publication and expressly disclaim, to the fullest extent permitted by law, any liability in connection with this publication. Willis Towers Watson offers insurance-related services through its appropriately licensed entities in each jurisdiction in which it operates. COVID-19 is a rapidly evolving situation and changes are occurring frequently. Willis Towers Watson does not undertake to update the information included herein after the date of publication. Accordingly, readers should be aware that certain content may have changed since the date of this publication. Please reach out to the author or your Willis Towers Watson contact for more information.

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