Consumer Packaged Goods

We specialize in providing best-in-class coverage for better-for-you food, beverage, and cosmetic companies. Just as you are providing refreshing, healthy, and forward-thinking products, we are refreshing the client experience for business insurance.

What are the biggest risks facing CPG companies?

The biggest concerns food, beverage, and cosmetic companies face is how will my product damage something or harm someone? What if we need to recall our products? Whether it’s a bad skin reaction to your natural makeup line, a chipped tooth from biting into your snack bar, or a cut finger from opening your canned CBD cold brew coffee, having the right insurance to cover your product is key.

Product liability protects you against claims of bodily injury or property damage caused by your covered products. Products that may be contaminated or defective need to be taken off the shelves and removed from the market. While Product Liability covers the bodily injury or property damage caused by the defective product, Product Recall policies pay for your costs incurred to pull your products from the shelves, destroy, and replace.

Most recall policies also include things like cost of investigation, public relations, and loss of business income. Recall policies are not standardized, which means that the policies can be very broad or very narrow, and your best bet is to work with an insurance broker that knows this area well.

Consumer Packaged Goods Insurance FAQ

1Do I need to get insurance if my copacker already has it?
While your co-packer should have insurance, you still need your own. As the brand, you take on all of the liability as the manufacturer. Everyone in the ecoysystem needs to have their own insurance that is designed to protect their specific risks and needs. Furthermore, relying on third party insurance is dangerous as you do not have control over customization, continuity of coverage, and limits purchased.
2Is product recall covered under product liability?
No, these are separate policies. While they may both respond in the event of contaminated product in the market causing illness or injury to people, they are not the same thing. Product liability covers claims of bodily injury (or property damage) to third parties because of your products, and product recall insurance covers the costs and expenses associated with recalling a product due to the bodily injury because of your products. Sometimes there are very low limits for recall included in a general liability policy, but it's not designed to be robust recall coverage.
3Can I get insurance for false advertising?
Realistically, no. Insurance companies do a lot to avoid providing coverage for false advertising. Be careful and intentional about claims made on labels. Advertising Injury, which is a coverage found on a General Liability policy, is not false advertising.
4Can I get prop 65 insurance coverage?
Yes! Most commonly you can get defense of violation of prop 65 as a sublimited coverage (lower limit than the policy limit).
5We don't have any cars - why do I need auto insurance?
Auto liability is an important coverage to have, even if you don't own company vehicles. Hired & Non-Owned Auto Liabilty (HNOA) provides coverage in a few important ways. Hired auto liability provides coverage for you when renting cars on company business - you can decline coverage at the counter if you have this. Non-owned auto liability provides coverage for you and your employees driving personal vehicles on company business. If there's an accident in a personal vehicle, but your company is named, this is the only policy that protects you. Your personal auto policy will not defend the company in this case. Also, if your personal auto policy responds but the limits are exceeded, this coverage will drop down and sit excess.

Insurance policies for CPG companies to consider

 

 

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