Mid-Year Product Recall Update

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BY:
Lori Hunter

Executive Vice President

David Fiske

Executive Vice President

July 28, 2021

Every minute that faulty consumer goods or tainted food products remain in circulation increases risks to the public. Compared to risk trends at the end of 2020, the top hardline product recalls and risk trends in the U.S. for the first part of 2021 were as follows (according to the 2021 SGS Product Recall Trends report):

  • Household furniture
  • Recalls due to injuries (up 13%) and chemical exposures
  • Recalls resulting from choking and cuts from children’s toys (up 200%)

Most recently was the recall of a Winnie the Pooh baby rattle, due to a choking hazard, and a recall of a particular brand of chest of drawers, due to tip-over and entrapment hazards. Sports and recreation products, toys and children’s products, electronics, appliances, and furniture continue to be key areas of focus for the U.S. Consumer Product Safety Commission in 2021.

According to a recent report by Willis Towers Watson (WTW), product safety has been flying under the radar due to government resource constraints implemented during COVID-19 that included a temporary cease in supplier verification for on-site audits. In addition, there was less management oversight in manufacturing due to the implementation of telecommuting. The WTW report stresses that, moving forward in a post-pandemic environment, many manufacturers are now looking to diversify their scope of products to help fill gaps in consumer demand caused by the pandemic. However, new products come with new risks – and now isn’t the time for companies to become lax and let their quality control guard down.

Regarding food recall activity, the Food and Drug Administration reported a 4.3% decrease in events in the first quarter of 2021, but an overall 31.9% increase in units impacted quarter-over-quarter, compared to 2020 (as reported by Quality Assurance & Food Safety magazine). The U.S. Department of Agriculture reported a 25% increase in food recall events in Q1 of this year.

A priority for the FDA Food Safety Modernization Act and the New Era of Smarter Food Safety is to advance food traceability and, when required, speed recalls. Last year, the FDA published the FSMA-mandated Proposed Food Traceability Rule that lays out key data elements and critical tracking events for enhanced traceability of certain foods. The final version of the rule should roll out in 2022.

Staying informed on recall events and trends allows brokers to best advise their clients regarding how to mitigate losses with the right product recall insurance coverage. To learn more about our products and services, or for answers to coverage questions, please contact Lori Hunter at 213-236-4585 or lori.hunter@amwins.com, or David Fiske at 312-465-5305 or david.fiske@amwins.com.

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