Recalls of consumer goods can bankrupt small manufacturers, but it doesn’t have to happen to your business. Product insurance can protect your company from losses due to defects in virtually anything made, whether appliances, clothing, furniture or electronic devices.
If you build quality goods, you may reason I have no need to protect my business from losses due to product recalls! However, mishaps can happen in any operation. All it takes is one small, overlooked issue, a few customer complaints and an investigation by the US Consumer Product Safety Commission (CPSC) to trigger a mass recall.
Consider the scenario of an embedded computer company. As technology advances, one of your product lines becomes obsolete. You receive printed circuit boards from China to build your latest innovation. Your usual manufacturer had extremely long lead times, so decided to go with another vendor. Stress testing reveals that the majority of boards pass with success. So your manufacturing team begins assembling the product, then selling to various buyers. After a couple of months, several clients complain of shorts, burn-outs or similar deadening of the product. An investigation is launched and a recall is mandated.
Hazards or defects discovered cause recalls that can cost your operation greatly. Choose a product insurance policy for recalls to recover from such losses and stay competitive in your market.