How To Prepare For A Product Recall?

No Cannabis Business wants to have a product recall. Unfortunately, Michigan has suffered from a 200 Million Dollar recall. 

As an insurance agent, this event raised many concerns for the Michigan Marijuana Market and my clients. I know that safety and quality are at the forefront of my clients and colleges in the industry but your company needs to ask the question when a product is defective in any way, is likely that consequences could become more severe such as the increase in product pricing, shortage of products in the market, and loss of income.

Preparing for a recall is an important part of a risk management portfolio. When it comes to insurance, there’s a difference between Product Recall and Limited Product Withdrawal Expense. The right insurance program, risk management is also about limiting your exposure.

You have to know the difference!!!

Product Recall/Withdrawal covers expenses that are sustained by distributors, retailers, vendors, customers, or another party that resulted directly from the recall or withdrawal of the product. This would also tend to cover legal defense costs if the company is sued.

Limited Product Withdrawal Expense is a first party coverage. It covers out-of-pocket expenses that occur to the insured.

 A recall or withdrawal means a detailed list of steps that must be taken for a company to properly handle this situation within laws and requirements.

  1. You need to notify customers, which might include direct communication or broader advertisements such as social media. 
  2. Plan to pay overtime will have to pay overtime to employees to help deal with the recall. 
  3. Obtain extra storage, and possibly expenses related to disposing of the products. 
  4. Additional staff may b need to remove the recalled products from point A to point B.
  5.  Hire consultants to aid in the management of all of these logistics involved with a recall or withdrawal. 
  6. Consider your Brand Reputation and hire a PR Consultant to help you navigate through the press.

To discuss how product liability can cover you and your business, please visit our website at

Brand loyalty is the number one driving force to customer and patient retention. We are inviting you to join our network and expand your reach to our large database of clients in your area. 

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