Helping clients minimise recall headaches
Claire Richards of AIG explains that brokers with food and beverage clients should be helping them prepare for a product recall scenario.
Video transcript below:
Claire Richards: Given that most food and bev manufacturers won’t have gone through the process of quantifying a recall and the potential impacts can often be quite surprising and terrifying to those organizations that don’t have a robust product recall plan in place.
Reporter: For any food and beverage business the idea of having to instigate a product recall seems remote. But as Claire Richards of AIG points out there is always a chance clients could be hit and not even really know the impacts.
Claire Richards, National Head of Crisis Management, AIG
Claire Richards: On an average we have seeing five recalls per month in Australiasia in the food and beverage industry and of that 2 to 3 of those are in Australia alone and it’s not uncommon for food and bev manufacturers to not disclose and the costs associated with a product recall which can give a false impression to the industry that these costs are manageable, but as we know product recalls can often be complex and very expensive.
Reporter: Richards points out it’s important brokers encourage clients to have a comprehensive recall plan.
Claire Richards: Well brokers will know that all of their food and beverage clients who want to prevent any incident that they have escalating into a crisis, so they can help them put in place a comprehensive product recall risk management plan which would include input from themselves and sharers food and safety and experts and crisis management consultants. Insurance should form just one part of an organisation’s overall risk management approach. So brokers can help and their clients align themselves where insurers that have comprehensive product recall policies.
Reporter: Finally she also urges brokers to get an idea of their projected cost, should a recall scenario arise through AIG’s new tool, Novi.
Claire Richards: WELL Novi encourages food and bev organisations to know their numbers, so in Latin know the means to know and Novi is a product recall cost estimator that helps organisations to quantify the financial impact of a product recall resulting from an accidental contamination. And Novi allows organisations to make more informed decisions about their product recall exposure and it can help them protect their customers, their supply chain and ultimately their bottom line.