HOW TO MANAGE A PRODUCT RECALL
Howard Insurance highlights three considerations in the aftermath of a recall and explains why having the right insurance to cover this situation is only part of being prepared.
From dangerous levels of bacteria in a well-known facial cleansing product to exploding smartphones, the reasons behind a product recall have almost no boundaries.
What’s more, because of constantly changing regulation both at home and abroad, manufacturers are having to pull back more products to the drawing board than ever.
Insurance that works to protect against losses associated with a protect recall is, for this reason, a sensible addition to any manufacturing policy, as Mark Hutton, head of product recall for the UK and Ireland at XL Catlin explains,
“The impact of a recall on brand reputation can be severe, and we know from experience that having the right help on hand is crucial to minimising the damage,” He said.
So what’s the best way to manage such as scenario, beyond have in the right insurance?
Communicate to your consumers
As a professor of mass communication, Dirk Gibson has thoroughly researched product recall practices extensively.
‘Oftentimes manufacturers, retailers, and trade associations are reticent for fear of product liability issues,’ he says. ‘But research tells us the public likes the impression that they are being dealt with honestly.”
If you know that you’re going to have to recall a product, be prepared to handle the confusion and frustrations of customers through communication which puts their mind at ease, gives instructions on how to return the product, and makes them aware of the hazards and the reasons for the recall.
If you only have a couple of people on the customer service desk, you might want to consider hiring temporary staff to manage phone calls and social media messages. A live web chat feature will also provide another channel of communication.
The more questions you can answer in an open and honest way, the quicker your customers will get over the inconvenience.
Take ownership of the situation
Timing is critical for two reasons:
- The longer the time elapses between discovering a problem and informing those affected allows more time for your customers to, at the very least, be inconvenienced and at worst, come into harm’s way.
- If the media get hold of your news before you have a chance to break it, you have no way to control how your business is portrayed.
Being ready to manage the situation also means ensure consistency by briefing all employees on the key messages to address any concerns.
Cooperate with regulators
If a mistake has been made, accept it, and do everything you can to help regulatory investigations go as smoothly as possible. Depending on the level of the problem and whether or not any harm has come to consumers, regulators may simply want reassurance that necessary steps are being taken to mitigate against consumer dissatisfaction, injury or illness.
If you’ve already conducted an internal investigation into the recall, and then reported it to the associated regulator, it shows professional responsibility which is reassuring both to the consumer and the agency.
Make sure you’re covered
There are many manufacturing policies and it’s wise to make sure that the one you have in place includes product recall cover. If you’re not sure, speak to our team at Howard Insurance Services to get more insight on how this can work for you and where it’s available, either as an add-on or as part of a complete package.
Get in touch with Howard Insurance Services to discuss your dedicated Manufacturer’s Insurance.