In last few decades, food & beverage industry has seen transformation all over the world because of awareness among consumers and consumer friendly law making manufacturers responsible towards consumers for any safety hazard. Hence, product recall incidents and legal liability claims have become common in this industry.

Indian regulatory authorities have become stricter on safety standards of food & beverages. According to Food Safety and Standards Act, 2006, if manufacturer discovers any hazard in its product which makes it unsafe for consumption, manufacturer must withdraw that product from market immediately. Similar Acts, Regulation and law are in force in all the countries.

Recent Incident:

General Mills, Inc., is an American multinational manufacturer and marketer of branded consumer foods sold through retail stores.

General Mill is recalling some bags of its Gold Medal Unbleached Flour because of salmonella concern. General Mill has discovered salmonella during sampling of the product. Salmonella can lead to fever, diarrhea, nausea and abdominal pain. Please visit source link for news.

Risk Exposure:

Following liabilities can arise from such incidents –

• Affected consumer (any consumer who incurred bodily injury or death after consumption) may bring legal action against manufacturer claiming compensation and such legal action can cost manufacturer in crores.
• Recall of product by manufacturer or distributer. Both manufacturer and distributer incur recall expenses (such as shipping cost, warehouse and storage expenses, disposal of product cost etc.). Recall expenses can be huge. Further, distributer may bring legal action against manufacturer claiming recall expenses incurred by it.

Risk Transfer:

Insurance companies are offering insurance policies to protect manufacturer from such unexpected incidents. These policies are-

• Commercial General Liability Policy / Product Liability Policy
• Product Recall Insurance Policy

-Thanks & Warm Regards

Beacon Insurance Brokers Pvt Ltd

Source: https://abcnews.go.com/Health/wireStory/general-mills-recalls-flour-salmonella-concerns-60592402