Lowering the risk of a product liability claim
By Paul Owens
Many small businesses either manufacture or distribute food products. This includes food served in restaurants or sold in retail stores, online or at farmer markets and craft fairs.
In 2018, USDA recalled approximately 125 food products. But mandatory food recalls are rare; most recalls originate with the company that produces the food product. The CDC and other reporting systems of FDA-regulated products can also recommend a food product recall.
If a food product is recalled for safety issues, it’s important to act quickly to prevent product liability claims by consumers. Consumer injury claims can result in costly compensations and lawsuits for everyone involved in the distribution chain.
4 steps involved in a food recall
- The maker or distributor of the product (that’s you!) notifies the appropriate authorities. Consumer hotlines are established where information can be obtained regarding the recall’s scope, including serial/batch numbers, where the product was sold, etc.
- Recall announcements are released on the appropriate government agency websites, the product maker’s website, and in print media notices. Television and radio news broadcasts may also be necessary. Announcement include information on returning the product for a full refund or replacement.
- Consumer groups typically notify the public when learning of food recalls.
- Consumer compensation varies depending on specific laws that govern consumer trade protection following an investigation into what triggered the recall.
If you manufacture, package, distribute, or sell any food products, keep this information handy and hope you won’t need it. I highly recommend that anyone producing or selling food products carry product recall insurance. A recall often results in very high costs, even if no consumers make claims. Contact your commercial insurance agent for more information on product liability and product recall insurance.