XL Insurance, the global insurance operations of XL Capital Ltd last month launched its primary food and drink Product Contamination Insurance with integrated crisis management cover for the Australian market.
The policy is a combined offering of both risk transfer and a crisis management service. It covers Accidental and Malicious Contaminations as well as extortion demands and provides cover for first and third party recall expenses through to the Insured’s loss of gross profit and rehabilitation expenses. In the event of a recall the policy also includes priority access via a 24-hour hotline to Sydney-based crisis management consultants, including PR specialists, Weber Shandwick. XL Insurance will also dedicate a portion of the premium for risk improvement projects such as recall and crisis planning, with an initial free consultation with Weber Shandwick.
Ed Mitchell, XL Insurance Senior Underwriter for Product Recall, said: “With a growing number of recalls in Australia and a limited product recall market XL Insurance is pleased to bring extra product contamination insurance capacity and experience to the industry. We understand the importance of clients being able to access our underwriters locally and will be looking to offer clients coverage on a stand-alone basis or in conjunction with our established liability offering.”
He added: “Following our model of partnering with local specialist crisis consultancies in the US and UK we also recognise the importance of being able to offer policyholders access to Australian-based consultants. We are therefore delighted to be working with Weber Shandwick in Sydney who can bring their own, as well as other specialists’, expertise to the table for our clients. With increasing regulatory scrutiny and public interest in food safety, companies are as much concerned about protecting their brand and reputation as the immediate financial impact. Our coverage is designed to help manage the crisis and protect the policyholder’s brand as well as covering the costs relating to the recall.”
According to Emma-Jane Granleese, Managing Director of Weber Shandwick, a food contamination issue handled poorly can have an enormous impact on future sales. “In 1991 Australia experienced just 15 food product recalls, last year that number ballooned to 68 recalls and the trend is expected to continue upwards. As the number of recalls rise it is increasingly important for companies to be prepared to handle the worst case scenario should it happen. With the correct preparation and planning, and a specialist team on hand when needed, we can help minimise the impact of a product recall on a company’s brand.”
XL Insurance has been offering catastrophe Product Contamination Insurance for the last 10 years and in 2007 expanded the product into the primary insurance market. XL Insurance will focus on the food and drink sector and offers primary Accidental Contamination capacity of AUD15 million and Malicious Contamination / Extortion capacity of AUD30 million as well as excess capacity of AUD30 million for Accidental and Malicious Contamination / Extortion.
About XL Insurance
XL Insurance is the global brand used by member insurers of the XL Capital Ltd (NYSE: XL) group of companies. Through its operating subsidiaries, XL Capital is a leading provider of global insurance and reinsurance coverage and services to industrial, commercial and professional service firms, insurance companies, and other enterprises on a worldwide basis. As of December 31, 2007, XL Capital Ltd had consolidated assets of approximately USD 57.9 billion and consolidated shareholders’ equity of approximately USD 10.1 billion.
www.xlcapital.com