We are increasingly hearing in the news about food products being withdrawn from supermarkets by authorities because they do not meet the health requirements for consumption.
This is because food safety regulation has become more demanding in recent years and new technologies have enabled the identification of new pathogens that are harmful to health. On the other hand, consumers have also helped to improve product quality by having a greater awareness of healthy eating.
Causes and consequences of food contamination
The main causes of food withdrawal are the presence of foreign bodies or pesticide residues and also harmful pathogenic micro-organisms.
The major food manufacturers are suffering from the consequences of increasing product recalls, because it is a direct cost to them, affecting the income statement in addition to the reputational cost which is often more difficult to recover.
Precautions: food quality control
To avoid food withdrawal, it is essential to carry out a thorough quality control of each batch of products delivered, as well as frequent internal audits to identify product contamination before it is too late.
However, there have been many cases where contamination has not been detected in time and the product has been placed on the market. For these cases, there is an insurance product that protects the company against this event: the product contamination insurance.
The product contamination insurance
Product contamination is that which can cause actual or alleged damage to health. This insurance is activated in case of:
- Accidental contamination
- Malicious manipulation, that is, intentional by a person inside or outside the organization.
- In the event of threat or extortion, by competitors or any third party. Even if there is no clear evidence that the products are contaminated.
What does product contamination insurance cover?
This is a very comprehensive insurance that has as main coverage the costs of withdrawal. These include the costs of destroying contaminated products and the costs of replacing and redistributing products.
The hedges are:
- Replenishment of contaminated goods already delivered to the market.
- Replacement of goods that have not yet been delivered but which may be suspected to be contaminated.
- Replacement of goods which have not been directly affected by the contamination but which, as a precaution, are not to be delivered.
- Loss of profit from pollution. That is, what the manufacturer has failed to input due to the lots that have been withdrawn or the extra costs of having to re-produce the lots that have been withdrawn.
- The costs of rehabilitation to enable the company to return to normal production. Imagine that a production line is detected to contain chemicals. The costs of cleaning this line would be the rehabilitation costs.
Other interesting coverage is the consultancy costs and the cost of advertising to improve reputation in case it has been affected.
The importance of food security with a tailor-made solution
Product contamination insurance is a highly specialized insurance tailored to the food manufacturers concerned with always giving consumers the best quality in their products.
This insurance allows you to cover the company’s own damages and also protect the profit and loss account. It also helps to improve the brand image and reputation of the organization.
For a first indicative proposal only simple information is needed. If you are a food manufacturer and you are concerned about product contamination, do not hesitate to contact us for professional and personalized advice that will allow your company to get protection to grow safely.
