Food fraud: Filling the gap in product recall cover

From ‘fake mānuka honey’ to French wine made in Spain, it’s clear that food fraud is on the rise. The Food Standards Agency estimates the cost of food fraud to UK consumers, businesses and government to reach up to £1.96 billion each year, in a trend that’s evident across the globe. This presents insurers with a dilemma: food fraud isn’t specifically covered by traditional product recall policies, also known as product contamination policies. So, in the event of a recall, how can we ensure businesses get the protection they need?

Let’s start at the beginning. Food fraud is a term that’s commonly used by media outlets but isn’t widely understood. The Food and Agriculture Organization of the United Nations defines it as “when a food supplier intentionally deceives its customers about the quality of the foods they are purchasing”. 

The 2013 horsemeat scandal shows how it works in practice. This infamous case saw supply chains that provided 'beef' across Europe infiltrated with horsemeat, resulting in millions of products being withdrawn, significant financial losses and a huge loss in consumer confidence for several established brands. 

It’s easy for businesses to think they can receive cover against such events. But in reality, traditional product recall policies require a product to either cause bodily injury or property damage to trigger a claim. Applied to the horsemeat scandal, and indeed many instances of food fraud, this isn’t the case. On one side, the presence of horsemeat alone wasn’t sufficient to be harmful to humans when consumed, while on the other side, many consumers argued the product was inedible due to the presence of foreign meat. In other words, the product recall was certain, but whether businesses would receive cover was not. 

With product recalls becoming more frequent, it’s time to bridge this gap and give businesses the protection they deserve. CFC’s product tamper for financial gain endorsement, is now available as an add-on for our product recall cover. If an employee or third party causes a product recall by altering or contaminating a product for financial gain, this policy ensures the business receives cover for the product recall costs. They’ll also receive reimbursement in relation to business interruption, rectification, crisis services and rehabilitation costs, helping them to fully bounce back from the incident.

Find more about CFC’s product tamper for financial gain endorsement by contacting our expert product recall team.