First party product recall insurance will not indemnify for the costs associated with contaminated pork products, said Miller

Many insurance policies purchased to indemnify for the costs of recalling a consumer product will not respond to the latest food scare involving Irish pork products, warned a broker.

‘First party product recall insurance policies won’t respond,’ claimed Kieron Russell of Miller’s special risks team.

That is because the underwriters of product recall insurance typically put within their policies exclusions for contamination by carcinogens. The recent pig meat scare stems from dioxin-tainted animal feed, which was used in up to ten farms in Ireland.

Product recall insurance also tends to include a manifestation clause. Whereby, if a policy is to respond, the contamination event needs to cause bodily injury within 'usually a 120 day period', said Russell. Dioxins are normally linked to cancer, which can take decades to manifest itself.

Reports claimed the Irish pork producers could face a bill of around Euro 100m after the contamination caused products to be pulled from the shelves of up to 25 countries. Russell said he thinks this figure is a ‘conservative estimate’ for the entire cost of the event.