Voluntary Recall

What Is a Voluntary Recall?

August 19, 2019

By David Fiske, Senior Vice President and Lori Hunter, Executive Vice President

Recalls involving defective products are most often defined as voluntary. However, the term “voluntary” can be confusing, creating the impression that a company or manufacturer has decided to recall a product strictly as a precautionary or quality-control measure.

The fact is, a voluntary recall is often times an arrangement that a manufacturer or retailer of a hazardous or defective product has negotiated with the federal agency in charge of overseeing the safety of that product category, and it is just as serious as a mandated recall. And while a company has the choice and ability to issue a truly voluntary recall on its own initiative, most recalls are negotiated. According to Consumer Reports, a voluntary incident should not be considered less urgent than a mandated recall; nor should the recall be viewed as a preliminary measure taken by a company strictly out of caution (i.e., that it would not otherwise be mandated by the regulating authority).

A voluntary recall is essentially an incentive for companies to cooperate, allowing the government to intervene and achieve its safety objectives in a more expedited manner. It can also help mitigate brand and reputational damage associated with a defect or contamination, allowing a company to demonstrate its commitment to doing the right thing. Today, both the Food & Drug Administration and the Consumer Product Safety Commission have the authority to mandate a product recall under certain circumstances, as do the federal district courts, however mandated recalls are actually rare.

In the past decade, the FDA alone reported 9,469 products in 4,075 separate product recall events — the highest total for a decade in history. As the U.S. government imposes more stringent product safety rules and regulations, businesses must be proactive when considering the risk of a product recall event.

For more information on product recalls and considerations when selecting comprehensive product recall insurance, please contact David Fiske at 312-465-5305 or dfiske@wwfi.com, or Lori Hunter at 213-236-4585 or lhunter@wwfi.com.

 

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