What a recall might look like for your business and how you can prevent it

By Abraham Danaher

Dear business owners: If you found out today that the plastic your company uses to manufacture all of its products was contaminated, what would you do?

Product recalls can be devastating.

On November 18, 2014, the National Highway & Traffic Safety Administration called for a nation-wide recall of all Takata airbags after dangerous defects in the product were discovered.

The recall ended up affecting 19 automakers, 42 million vehicles and 65 million airbags.

The scope of this recall was massive, and so was its effect on Takata. In lieu of the recall and the $10 billion in liability that the company owed, Takata was forced to file for Chapter 11 Bankruptcy.

While the Takata recall is an extreme example, remember that not all recalls involve international companies and billion dollar liabilities. Any company can be devastated by product recalls.

In 2017, Quality Foam, a company based in Brooklyn, NY, recalled over 12,000 mattresses. The products posed a fire hazard to customers and failed to meet the required flammability standards for mattresses. No one was hurt by the product and Quality Foam did not go bankrupt, but the company needed to provide all customers of the recalled mattress a free mattress cover to bring the product into compliance. It was costly fix – both in the monetary sense and to the company’s reputation.

There are two ways you can protect your business:

Product Liability Coverage: This insurance covers a product that fails and causes direct bodily injury or property damage to the customer or any other party.

Product Recall Insurance: This covers expenses a company would incur if they were forced to pull a product off the shelves. This includes transporting faulty products to another store, editing or disposing of them, hiring additional staff to help manage the situation, repairing and replacing the product, and the costs associated with public relations and media controlling. Most policies also include coverage for legal defense and disbursements, forensic inspections or internal investigations.

Abraham Danaher worked as an intern at OneGroup in 2018.

This content is for informational purposes only and not for the purpose of providing professional, financial, medical or legal advice. You should contact your licensed professional to obtain advice with respect to any particular issue or problem. Please refer to your policy contract for any specific information or questions on applicability of coverage.

Please note coverage can not be bound or a claim reported without written acknowledgment from a OneGroup Representative.

For Immediate assistance call 1-800-268-1830

How technology helps schools and school districts with safety plans and safety training.

By Douglas Cook, CIC, CPA

One of the greatest benefits of having technology always at our fingertips is our ability to learn new things so quickly. And no one appreciates learning as much as our teachers and the highly-skilled administration teams they work with every day.

These professionals studied for many years to master subjects like math, science, English, history, and music, so they could help us (and our children) learn new things. Nowadays, they must take on a new subject: safety. Maintaining a safe school seems to get harder and harder every day, and our schools’ teachers play a key role in maintaining safety for themselves and our children.

Every year, teachers take specific courses to learn what to do if they see aggressive behavior in a student, notice a child is missing, or are alerted to an emergency. They are taught what to do if they see a stranger in school, notice a slippery floor, see water leaking and so on.

Safety requires coordinated action by teachers and staff in every school. This coordination is often the result of training done by the school districts – oftentimes a huge project for the organizers.

Since technology can be so useful for learning, safety training found on OneGroup.com in our OneGroup Risk Management Center allows our clients to organize a training schedule for each employee, track who has completed which trainings and more.

These trainings are also archived in the platform. That way, when the unexpected happens, teachers and administrators can look up exactly what to do. Knowledge truly is power.

Douglas Cook is a Business Risk Specialist at OneGroup. He can be reached at 610-867-4169 or [email protected].

This content is for informational purposes only and not for the purpose of providing professional, financial, medical or legal advice. You should contact your licensed professional to obtain advice with respect to any particular issue or problem. Please refer to your policy contract for any specific information or questions on applicability of coverage.

Please note coverage can not be bound or a claim reported without written acknowledgment from a OneGroup Representative.

For Immediate assistance call 1-800-268-1830